Neither Reply Filed nor Tax Amount Paid Arising from GSTR-2A and 3B Mismatch: Madras HC Orders Fresh Hearing [Read Order]

The Madras High Court set aside an Goods and Services Tax ( GST ) assessment order related to the financial year 2020-2021, directing a fresh hearing in a case involving discrepancies between GSTR-3B and GSTR-2A returns. The court noted that neither reply filed nor tax paid arising from the mismatch.

The petitioner, M/s.Sugos Steel Traders, a registered dealer in iron, steel, and M.S. scraps under the CGST/TNGST Act, 2017, faced scrutiny over mismatches in returns. Despite filing returns and paying taxes, discrepancies surfaced during scrutiny, prompting the issuance of a show cause notice (Form GST DRC-01) on February 7, 2024, via the GST portal.

Following this, three reminder notices were issued, but the petitioner neither filed a reply nor paid the tax amount, leading to the issuance of the impugned assessment order dated May 16, 2024.

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During the hearing, the petitioner requested an opportunity to address the discrepancies and cited a precedent set in M/s. K. Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise. The petitioner expressed willingness to deposit 25% of the disputed tax to secure a rehearing.

The respondent, represented by the learned Government Advocate, raised no objections to this proposal.

The bench of Justice Mohammed Shaffiq directed the petitioner to deposit 25% of the disputed tax within two weeks. On compliance of the pre-deposit, the impugned order would serve as a show cause notice, allowing the petitioner four weeks to submit objections with supporting documents. The adjudicating authority was directed to pass a fresh order after providing a reasonable opportunity for a hearing.

If the petitioner fails to meet the stipulated deadlines for the deposit or filing objections, the original assessment order would be restored. The High Court thus disposed of the writ petition. Mr.Manoharan S.Sundaram and Mr.V.Prashanth Kiran, Government Advocate appeared for the petitioner and the respondents respectively.

To Read the full text of the Order CLICK HERE

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