The Madras High Court mandated a pre-deposit of 10% to contest the discrepancy of Goods and Services Tax Returns ( GSTR 1 ) and GSTR 3B.
The challenge to an assessment order dated 19.10.2023 has led the Madras High Court to remand the matter for reconsideration, citing the petitioner’s lack of reasonable opportunity to contest the tax demand on merits.
The petitioner’s contention arises from a notice in Form GST ASMT 10 issued on 24.05.2023, followed by a show cause notice dated 18.08.2023 and a subsequent reminder.
The counsel for the petitioner argued that the tax proposal concerning discrepancies between GSTR 1 statement and GSTR 3B returns was reconciled in the GSTR 9C return, specifically noting the payment of the unreconciled amount in April 2018. Thus, the petitioner sought an opportunity to contest the tax demand.
Mrs. K. Vasanthamala, learned Government Advocate, emphasised that the petitioner had adequate time to respond to the show cause notice and was offered personal hearings on multiple occasions.
The Court observed that the confirmed tax proposal centred on the discrepancy between the petitioner’s GSTR 1 statement and GSTR 3B returns. While acknowledging the petitioner’s efforts to reconcile the discrepancy, the Court deemed it appropriate to provide the petitioner with an opportunity, albeit with conditions.
Consequently, a Single bench of Justice Senthilkumar Ramamoorthy set aside the impugned order dated 19.10.2023 and the matter was remanded for reconsideration, contingent upon the petitioner remitting 10% of the disputed tax demand within two weeks.
The petitioner was also allowed to submit a reply to the show cause notice within the stipulated period, accompanied by relevant documents. Upon satisfaction of the pre-deposit and receipt of the petitioner’s reply, the respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh assessment order within two months.
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