Madras HC sets aside GST Order due to Supplier Declaration and Tax Rate Defects, directs Re-adjudication [Read Order]

The Madras High Court has set aside a Goods and Services Tax (GST) order due to defects in supplier declarations and tax rates. The court has remanded the order for reconsideration by the concerned authorities.

The writ petition was filed to challenge an order issued by the respondent, specifically concerning two tax proposals for the assessment period 2017-18. Proceedings were initiated against the petitioner through the issuance of a show cause notice regarding eight defects. The petitioner replied to the show cause notice, and consequently, the impugned order was issued based on these facts and circumstances.

S. Ramanan, the petitioner's counsel, argued that defect no.1, concerning supplier declarations, should be set aside as the petitioner had submitted declarations from the suppliers, which were not considered by the assessing officer.

The petitioner also argued that with respect to defect no. 8, concerning tax rates, there was a discrepancy between the specified tax rate of 12% in the show cause notice and the 18% specified in the impugned order.

V. Prasanth Kiran, appearing for the respondent, submitted that the petitioner's reply was duly taken into consideration by the assessing officer and most of the tax proposals were dropped upon such consideration.

The respondent, referring to the submission of supplier certificates, stated that such supplier declarations were not provided by the petitioner to the assessing officer. In terms of credit notes, he highlighted that the appropriate GST rate is 18%. The petitioner admitted reporting credit notes valued at Rs. 35,57,054/-, while a deduction of Rs. 66,51,937/- was reflected in the petitioner's annual returns regarding credit notes.

The court noted the submissions and directed that the supplier declaration be verified by the assessing officer upon remand. The court considered the discrepancy and ordered the liability to be discharged at the GST rate of 12% as a condition for remand.

The court also noted that the petitioner accepted the imposition of a penalty in respect of defect no.2, which was also to be paid as a condition for remand.

The bench of Justice Senthilkumar Ramamoorthy set aside the impugned order only insofar as it pertained to defect no.1 and defect no.8. The matter was remanded for re-consideration, with the respondent directed to issue a fresh order on these two defects after providing a reasonable opportunity to the petitioner, including a personal hearing.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates