GST: Non-Communication of Mismatch with Details by Supplier and Dealer is a Mere Technical Breach, Notice cannot be Quashed, rules Madras HC [Read Order]
![GST: Non-Communication of Mismatch with Details by Supplier and Dealer is a Mere Technical Breach, Notice cannot be Quashed, rules Madras HC [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/06/GST-Non-Communication-Mere-Technical-Breach-Notice-Madras-HC-taxscan.jpeg "GST: Non-Communication of Mismatch with Details by Supplier and Dealer is a Mere Technical Breach, Notice cannot be Quashed, rules Madras HC [Read Order]")
In a significant ruling, the Madras High Court has upheld the legality of the show cause notice based on mismatch in returns filed by the supplier and the dealer by holding that the same amount to a mere technical breach. The petitioner, M/S Mahendra Feeds and Foods,is a dealer under the GST regime. He has availed Input Tax Credit (ITC) for the Financial Year 2017-18 and 2018-19 from...
In a significant ruling, the Madras High Court has upheld the legality of the show cause notice based on mismatch in returns filed by the supplier and the dealer by holding that the same amount to a mere technical breach.
The petitioner, M/S Mahendra Feeds and Foods,is a dealer under the GST regime. He has availed Input Tax Credit (ITC) for the Financial Year 2017-18 and 2018-19 from December 2017 to March 2019. But, according to the Revenue, the ITC claimed by the petitioner was a wrong claim because, there was a complete mismatch between the supplier and the petitioner who was in the receiving end, as the supplier, in support of its outward tax has not paid the tax or not shown the same in their accounts, as if that they paid the tax. Therefore, a show cause notice was issued and it has been replied. However, the Assessing Officer rejected the contentions and confirmed the proposals mentioned in the notice.
Justice R.Suresh Kumar observed that “after receipt of the show cause notice, if at all the petitioner wants to rectify the mismatch between the petitioner and the supplying dealer, the supporting documents to substantiate that the output tax had been paid by the supplying dealer at their end should have been procured and filed along with the reply submitted by the petitioner, which they failed to do. Therefore, the technical reason that under Section 42(3) it should have been communicated at the earliest point of time and therefore the show cause notice cannot be treated as communication intimating the mismatch between the supplier and the petitioner, cannot be countenanced. Therefore, on that ground, this Court feels that the impugned order cannot be successfully challenged.”
Mr. K. Mohana Murali, Senior Panel Counsel appeared for the department.
To Read the full text of the Order CLICK HERE
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