The Madras High Court has ordered a reconsideration of the case pertaining to the timely payment of Goods and Services Tax ( GST ) dues, specifically addressing discrepancies between Goods and Services Tax Returns ( GSTR ) 1 and GSTR 3B. This order followed the court’s observation that despite acknowledging the prompt payment of GST dues, the officers overlooked this fact.
The petitioner, under scrutiny following an inspection, received an intimation on 14.02.2023, followed by a show cause notice on 17.03.2023. Replies were duly provided, leading to the issuance of the impugned order.
During the legal proceedings, the petitioner’s counsel highlighted two critical issues. Firstly, concerning a disparity in turnover declared in GSTR 3B compared to the GSTR 1 statement, it was noted that the petitioner had cleared tax dues well in advance of the intimation. Secondly, regarding the reversal of Input Tax Credit ( ITC ) claimed for purchases from Sri Vela Hardware and Paints, discrepancies arose regarding the nature of purchases.
In response, the Additional Government Pleader argued that despite partial liability discharge, penalty imposition was justified. However, upon examination, it was evident that the respondent’s conclusions contradicted the documented evidence.
A single bench of Justice Senthilkumar Ramamoorthy observed that upon reviewing the contested order, it is evident that the respondent acknowledged the petitioner’s timely payment of outstanding amounts concerning the variance between GSTR 1 and 3B on January 9, 2023.
Despite this recognition, the respondent erroneously stated on Page 23 of the transcript that the taxable entity failed to settle tax obligations within 15 days of receiving the notice dated March 17, 2023. This assertion contradicts the documented evidence.
Regarding the reversal of ITC for purchases from Sri Vela Hardware and Paints, it remained unclear on what grounds the conclusion was reached regarding the petitioner’s paint procurement, especially in light of the petitioner’s response dated September 23, 2023, along with the accompanying documents.
The outstanding liabilities of Rs.20,232/- each, as highlighted by the Additional Government Pleader, pertain to this issue rather than the initial one. Given that the petitioner’s response and accompanying documentation were disregarded, the contested order lacks merit concerning these matters.
Based on the aforementioned grounds, the bench set aside the contested order and remanded the matter for reconsideration. Accordingly, the writ petition was disposed of.
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