The Madras High Court granted an opportunity for hearing to the assessee who received notices and the orders on discrepancy on the Input Tax Credit ( ITC ) and the Reverse Charge Mechanism ( RCM ) liability in the ( Goods and Services Tax Returns ) GSTR 3B Returns.
The petitioner’s counsel submitted that the petitioner is a registered dealer under the GST Act. During the relevant period of 2018-19, the petitioner has filed the returns and paid appropriate taxes.
However, on verification of the returns filed by the petitioner it was found that there was a discrepancy between ITC reported in Col.4A(2)(3) with that of RCM liability reported in Col.3.1(d) of GSTR-3B.
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In addition, the counsel argued that an intimation in ASMT-10 was issued followed by a notice in Form DRC-01 and personal hearing on 26.04.2024. However, the petitioner had not responded to any of the above notices / intimation and the impugned order came to be passed.
The petitioner’s counsel argued that neither the show cause notices nor the impugned assessment order were served on the petitioner through tender or Registered Post with Acknowledgment Due (RPAD). Instead, they were merely uploaded in the “view additional notices” section of the GST portal.
As a result, the petitioner remained unaware of the proceedings and could not participate in the adjudication process. The counsel further submitted that, if granted an opportunity, the petitioner would be able to address and clarify the alleged discrepancies effectively.
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The petitioner relied on the recent judgment in M/s. K. Balakrishnan, Balu Cables v. Assistant Commissioner of GST & Central Excise, where a similar matter was remanded subject to payment of 25% of the disputed tax. The petitioner expressed readiness to comply with this condition and sought an opportunity to present objections before the adjudicating authority.
The respondent’s counsel raised no serious objection.
Justice Mohammed Shaffiq set aside the impugned order dated 30.04.2024, instructing the petitioner to deposit 25% of the disputed tax within four weeks. Upon compliance, the order would act as a show-cause notice, allowing the petitioner to submit objections with supporting documents. The respondent was directed to review the objections and issue a fresh order after granting a fair hearing.
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Failure to comply within the timeframe would result in the restoration of the impugned order. Recovery actions, including the attachment of bank accounts, are to be lifted upon meeting the conditions. The writ petition was disposed of.
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