Tax Proposal Arose due to an Unintentional Error while Filing GSTR-3B Returns: Madras HC remands Matter for Reconsideration [Read Order]

The Madras High Court remanded the matter for reconsideration after it was revealed that the tax proposal arose due to an unintentional error while filing GSTR-3B returns.

The petitioner asserts that he was unaware of proceedings culminating in the impugned assessment order because the show cause notice and impugned order were uploaded on the “View Additional Notices and Orders” tab on the GST portal, but not communicated to the petitioner through any other mode.

Mr. Harini S.P representing the petitioner referred to the impugned order and pointed out that the tax proposal arose as a result of an inadvertent error committed by the petitioner while filling up the GSTR 3B returns in as much as amounts were erroneously filled up in the RCM column instead of 'all other ITC' column. If an opportunity is provided, further submitted that the petitioner would be in a position to establish that only eligible Input Tax Credit was availed. On instructions, learned counsel for the petitioner submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.

Mr. C. Harsha Raj, representing the Additional Government Pleader, accepted the notice for the respondents and pointed out that the principles of natural justice were complied with by issuing a show cause notice dated 22.09.2023, a personal hearing notice dated 02.11.2023, and by offering a personal hearing on 08.11.2023.

The bench noted that the tax proposal pertains solely to the alleged wrongful availment of ITC, while the counsel for the petitioner submitted that the petitioner had availed of eligible ITC but committed an inadvertent error while filling up the GSTR 3B returns. In these circumstances, it is just and necessary that the petitioner be provided an opportunity to contest the tax demand on its merits, albeit by putting the petitioner on terms.

Thus the single bench comprising Justice SenthilKumar Ramamoorthy noted that the impugned order dated 21.11.2023 was set aside and the matter was remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is permitted to submit a reply to the show cause notice. Upon receipt of the petitioner's reply and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a period of three months from the date of receipt of the petitioner's reply. Accordingly, the writ petition was disposed of.

To Read the full text of the Order CLICK HERE

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