SCN Proposes GST Demand for under Declaration of Output Tax and GSTR-01/GSTR-09 Mismatch: Delhi HC remands Matter for Fresh Consideration [Read Order]

The Delhi High Court has remanded a GST matter for fresh consideration after a show cause notice (SCN) was issued due to an under declaration of output tax and a mismatch between GSTR-01 and GSTR-09, setting aside an order passed under Section 73 of the Central Goods and Service Tax ( CGST) and Delhi Goods and Service Tax Acts ( DGST) for the financial year 2018-19, dated April 13, 2024, which the petitioner challenged on the grounds of a technical glitch that led to a substantial tax demand.

The petitioner, Celebi Delhi Cargo Terminal Management India Pvt Ltd, had received a Show Cause Notice (SCN) on January 8, 2024, which proposed multiple GST demands. The main demand, amounting to ₹31, 13,79,219/-, was based on a mismatch between the data field in GSTR-01 and GSTR-09. The petitioner argued that this discrepancy was due to a technical error in the GST portal, which incorrectly added the GST component related to advance adjustments in Table 11B of GSTR-01 to the output tax liability, instead of reducing it.

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Despite submitting a detailed reply and being heard, the adjudicating authority rejected the petitioner's contention and confirmed the demand. However, the petitioner pointed out that the same issue had arisen for the 2019-20 financial year, where the adjudicating authority, in an order dated August 25, 2024, accepted the petitioner's argument and dropped the demand for that period.
Given that the controversy revolves around a narrow issue and the adjudicating authority has already ruled in favor of the petitioner for the subsequent period, the High Court found it appropriate to remand the matter for fresh consideration. A bench comprising Justice Vibhu Bhakru and Justice Sachin Datta ruled that the adjudicating authority should pass a new order after affording the petitioner a personal hearing.

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As a result, the impugned order was set aside, and the matter was remanded. The court also cancelled the hearing scheduled for October 3, 2024, and disposed of the petition and all pending applications.

To Read the full text of the Order CLICK HERE 

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