In a recent ruling, the Madras High Court remanded the Goods and Services Tax ( GST ) assessment matter due to an error in Input Tax Credit ( ITC ) figures and inconsistent amounts in the final order by GST Authorities.
Sripathi Paper and Boards Private Limited (petitioner), a company engaged in the business of manufacturing paper and paperboard. An audit was conducted for the financial years 2017-2018, 2018-2019, and 2019-2020.
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Several visits were made by the audit team to the petitioner’s premises, followed by an audit report identifying 38 defects. The petitioner received a rectification order and assessment order related to GST for the year 2018-2019. The audit pointed out 38 defects, 31 of which were confirmed in the final order of assessment.
The petitioner challenged the final order before the court arguing that the order was passed without considering their detailed objections, making it a non-speaking order.
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The petitioner’s counsel argued that the GST assessment order contains discrepancies and errors in the calculation of Input Tax Credit ( ITC ). Specifically, while Defect No. 27 represented a sum of Rs. 4,68,68,005, the order contains three different figures Rs. 11,32,128, Rs. 82,60,354, and Rs. 4,68,68,005.
The counsel further contended that the amount of Rs. 11,32,128, which relates to Defect No. 12, was mistakenly applied to Defect No. 27, demonstrating a non-application of mind to the facts and evidence on record by the tax authorities.
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On the other hand, the respondent’s counsel without objecting to the claim submitted that the respondent would re-do the entire assessment.
A single bench led by Justice Mohammed Shaffiq noted that there were inconsistencies in the figures presented in the assessment order, supporting the petitioner’s claim that there was an error in calculating ITC.
Therefore, the court set aside the impugned assessment order dated 30.06.2023 and directed that it be treated as a show-cause notice. The court directed the petitioner to submit the relevant documents before the respondent. The petitioner’s writ petition was allowed.
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