GSTR-1 Turnover Reporting Error Leads to Tax Liability of Rs. 1.4 Cr: Madras HC Quashes DRC-07 Order, Grants Opportunity to Contest [Read Order]
The Court acknowledged the discrepancy in turnover reporting and deemed it necessary to provide the petitioner with an opportunity to establish the genuine turnover figure
![GSTR-1 Turnover Reporting Error Leads to Tax Liability of Rs. 1.4 Cr: Madras HC Quashes DRC-07 Order, Grants Opportunity to Contest [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/04/GSTR-1-Turnover-Reporting-Error-Leads-Tax-Liability-Madras-HC-Quashes-DRC-07-Grants-Opportunity-to-Contest-taxscan.jpg "GSTR-1 Turnover Reporting Error Leads to Tax Liability of Rs. 1.4 Cr: Madras HC Quashes DRC-07 Order, Grants Opportunity to Contest [Read Order]")
The Madras High Court has intervened in a case where a taxpayer faced GST liability of Rs. 1.4 crore due to an erroneous turnover reporting in their GSTR-1 return. The Court, acknowledging the gravity of the situation, quashed the DRC-07 order and granted the taxpayer a crucial opportunity to contest the assessment. The petitioner asserted that their GST registration was cancelled...
The Madras High Court has intervened in a case where a taxpayer faced GST liability of Rs. 1.4 crore due to an erroneous turnover reporting in their GSTR-1 return. The Court, acknowledging the gravity of the situation, quashed the DRC-07 order and granted the taxpayer a crucial opportunity to contest the assessment.
The petitioner asserted that their GST registration was cancelled upon request on 21.01.2021, after which they remained unaware of subsequent proceedings culminating in the impugned assessment order dated 20.12.2023.Â
Upon discovering the error in turnover reporting, the petitioner promptly submitted a representation dated 05.02.2024, clarifying the correct turnover figures and attributing the tax liability to an inadvertent error while filing the GSTR 1 return.
The counsel for the petitioner emphasised that the corrected turnover figures are substantiated by the petitioner's invoices, warranting an opportunity to contest the tax demand.
However, Mr. T.N.C. Kaushik, Additional Government Pleader, representing the respondent, contended that the petitioner failed to respond to prior notices and that a revision of assessment cannot be carried out through rectification proceedings.
Upon examination of the petitioner's reply dated 05.02.2024, the Court acknowledged the discrepancy in turnover reporting and deemed it necessary to provide the petitioner with an opportunity to establish the genuine turnover figure. The impugned assessment order, imposing a substantial tax liability, is deemed questionable solely on the grounds of erroneous turnover reporting.
A single bench of Justice Senthilkumar Ramamoorthy quashed the impugned order dated 20.12.2023 and remanded the matter for reconsideration. The petitioner was directed to submit a comprehensive reply to the show cause notice dated 20.09.2023, enclosing all relevant documents, within two months. Upon receipt of the petitioner's reply, the respondent is instructed to provide a reasonable opportunity for a personal hearing and issue a fresh order within two months.
To Read the full text of the Order CLICK HERE
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