Prejudice is caused to Taxpayers Rights when GSTR-9 is ignored when Errors committed are Revenue: Calcutta HC [Read Order]

In a recent decision the Calcutta High Court observed that ignorance of GSTR-9 by the Revenu authorities causes prejudice to taxpayers's rights when errors committed are revenue neutral.

The appellant by letter dated 13th September, 2018 addressed to the officer concerned gave a clarification stating that they have filed GSTR-3B return for the period from October 2017 to March 2018, which does not include both Input and Output Cess and they have filed GSTR-1 for the month of October 2017, which does not include Cess but have filed GSTR-1 for November, 2017 to March, 2018, which includes Cess @ 5% and Cess (Specified) amount. The appellant submitted a statement of Cess @ 5% and Specific Cess with all the Input, Output and carried forward amounts for the kind consideration of the officer.

Subsequently, another communication was sent on 10th February, 2020 bringing to the notice of the department certain information as contained in GSTR Form-9. The appellant stated that during preparation of data for GSTR-9, it was noticed by him they have inadvertently missed certain output GST liability on account of Compensation Cess from GSTR-3B returns for the relevant financial year and has also missed equivalent amount of Input tax credit of Cess for such supplies. It was further stated that while filing GSTR-9, they have corrected the error by showing the exact amount of compensation Cess payable by them during the said period as could be seen from Table 4A of GSTR-9.

The appellant stated that the error was unintentional as GST was a new tax at the relevant time and he is a small assessee and there was no revenue loss to the Government as the entire exercise was revenue neutral and also there was no gain to the appellant by showing incorrect figures in their returns as they have sufficient balance of Input Tax Credit for the same.

Therefore, it was submitted that the error was not unintentional, it was without any ulterior motive and mens rea or intent to evade tax. Therefore, the authority was requested to take into consideration the same. However, in the pre show-cause notice, intimation, which was given on 6th September, 2022, the authority was not inclined to do so and as requested by the appellant on the ground that the GSTR-3B was not rectified within the time permitted.

A Division Bench of Chief Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya observed that “Therefore, if the GSTR-9, which was filed within time is not considered, the assessee’s rights would be greatly prejudiced. The second aspect, which has persuaded us is the contention of the assessee that the entire matter is revenue neutral. Thus, considering the peculiar facts and circumstances of the case making it clear that this order should not be treated as a precedent, we are inclined to remand the matter back to the adjudicating authority viz. , the Assistant Commissioner, State Tax, Taltala and New Market Charge to consider the submissions made by the assessee, afford an opportunity of personal hearing, examine the annual return filed in GSTR-9 and proceed to take a fresh decision on merits and in accordance with law.”

To Read the full text of the Order CLICK HERE

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