The Madras High Court has granted the petitioner an opportunity to substantiate the defence concerning a mismatch in Input Tax Credit ( ITC ) between GSTR-3B and GSTR-2A for the 2017-18 financial year on 10% pre-deposit.
Ram Enterprises, the petitioner, a hardware retail trader, challenged an order imposing a tax liability of Rs. 7.51 lakhs, arguing that the order was passed without providing an opportunity to substantiate their ITC claim. The petitioner maintained that there was no mismatch, and they were eligible for the full ITC claim.
The counsel of the petitioner submitted that he has received specific instructions that no such reply was given by the petitioner and in any case, the so called reply that has been pointed out by the Government Advocate (Tax) runs to only two lines without any elaborate explanation on the side of the petitioner with supporting documents.
The respondent argued that the petitioner was given an opportunity to respond and had submitted a brief reply. However, the petitioner contended that no such reply was filed, and if one existed, it was inadequate and lacked supporting documents.
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Justice N. Anand Venkatesh noted that in the present case, notice was issued by the respondent but however, the petitioner did not receive the same. On going through the impugned order, it is seen that a total tax liability of Rs.7.51 lakhs has been imposed against the petitioner.
It found that the petitioner has come up with a clear case that there are sufficient materials/documents to substantiate the defence of the petitioner to the effect that there was no mismatch of the input tax claim between GSTR3B and GSTR-2A.
The court directed the petitioner to deposit 10% of the disputed tax amount within four weeks. Upon compliance, the petitioner was directed to submit relevant documents.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
The GST dept was instructed to issue fresh notice to the petitioner and afford opportunity of personal hearing and pass final orders within three months thereafter.
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