In a recent case, the Delhi High Court held that no specific approval of the monitoring committee is required for alterations in computational errors that occurred in the amount of tax.
The writ petition was filed by Bedi And Bedi Associates. The petitioner had availed of an exemption from the payment of Goods and Services Tax (GST) in respect of outward supplies made to a Polytechnic (Vocational Institution) in terms of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
The Superintendent, Audit, CGST Commissionerate, had issued a letter requesting the petitioner to provide the specific notification number under which the exemption was claimed, as well as the details of the outward supplies.
The petitioner responded to the said letter. The gist of the observations indicates that the concerned authority was of the view that the petitioner was not entitled to exemption under Notification No. 12/2017. According to the concerned authority, supplies made to a Polytechnic could not be considered as supplies to an educational institution.
The petitioner was required to pay GST of ₹49,16,111/- along with interest and penalties, as per the observations. By the Monitoring Committee, the aforementioned observations were approved.
However, thereafter, two corrigendums were issued: Corrigendum dated 25.08.2023 and Corrigendum dated 28.08.2023, and the demand raised was amended. Further, a show cause notice (SCN) was issued under Section 74 of the Central Goods and Services Tax Act, 2017, alleging that a sum of ₹1,79,56,485/- was recoverable from the petitioner for wrongfully availing the exemption along with interest and penalty.
The petitioner, without responding to the SCN, approached the court against the corrigendums dated 25.08.2023 and 28.08.2023, as well as the impugned SCN.
The final audit observations are approved by the Monitoring Committee. The impugned corrigendums only purported to correct the quantification of the tax recoverable. Any alteration in the amount of tax on account of a computational error may not require specific approval of the Monitoring Committee.
Harpreet Singh, learned counsel who appears for the respondents, argued that the impugned corrigendums were placed before the Monitoring Committee at a meeting held on 17.08.2023 and were specifically approved.
After analyzing the facts and arguments of both parties, a division bench of Justice Vibhu Bakhru and Justice Amit Mahajan held that no specific approval of the monitoring committee is required for altering computational errors in the amount of tax.
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