GST Officer Rejected Jindal Steel’s Rectification Plea on GST Shortfall between GSTR-3B & E-Way Bill Arbitrarily: Orissa HC Directs Proper Hearing [Read Order]

The Orissa High Court recently rebuked the mechanical rejection by the Goods and Services Tax (GST) authorities against a rectification application filed by Jindal Steel regarding an apparent shortfall in tax amount between GSTR-3B and the E-wayBill on the portal.

Jindal Steel is a prominent entity in the Indian iron and non-alloy steel industry, and has filed its annual returns in Form GSTR-9 and GSTR-9C for Financial Year 2020-21.

The returns were subject to scrutiny after the concerned officer noticed a variance between the turnover declared in GSTR-3B and that which appeared on the E-Way Bill portal.

Based on this mismatch, Jindal Steel was issued a notice through Form GST ASMT-10 on 13 November 2023 under Rule 99 of the CGST/OGST Rules, 2017, alleging under-reporting of taxable supplies, including zero-rated supplies by Jindal.

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While the Department stated to have uploaded the notice on the GST portal, Jindal Steel contended that it was never served on them and that all communications were only visible later under the portal tab titled “Additional Notices/Orders” tab on the portal.

Despite this, the Officer proceeded to pass an ex parte order dated 6 January 2025 under Section 73 of the GST Act, raising a demand of ₹8,62,80,720, as the differential demand arising from the shortfall between the tax payable as per GSTR-3B and the tax payable as per E-Way Bill data.

Jindal Steels later moved an application under Section 161 of the GST Act, seeking rectification of what it described as a factual error; however the same was rejected vide an order dated 20 June, 2025, leading to this present petition before the High Court.

Rudra Prasad Kar, appearing for Jindal Steels submitted that the initial order was passed by the Officer without providing the petitioner an opportunity of hearing and the same was never served upon the petitioner.

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A key argument raised by the petitioner was that they had filed the rectification application along with the reconciliation of the figures, yet the State Tax Officer rejected the same by a laconic and terse order, bereft of any reason for rejection.

It was argued that the mismatch was due to the fact that E-Way Bill data includes all movements of goods, including those to the petitioner’s own units which are not "supplies" as per GSTR-3B.

Sunil Mishra, Standing Counsel for the Revenue, submitted that the writ petition was not maintainable as there is an alternative remedy of appeal. He contended that the petitioner was not vigilant as the notice was already uploaded on the portal, and that in such an instance, no fault could be attributed towards the proper officer.

The Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman observed that the order of rectification dated 20.06.2025 passed under Section 161 of the GST Act was indeed passed without assigning any reason and without affording any opportunity of hearing.

For this, the court referred to the judgment in Assistant Commissioner, Commercial Tax Vrs. Shukla & Brothers, (2010) where it was reiterated that assigning reasons in every order was a cardinal principle.

The Court noted that the authority had failed to consider the records and documents produced by the petitioner to support the reconciliation of figures between GSTR-3B and the E-Way Bill data.

Under such circumstances, the High Court remanded the case to the state tax officer with the direction that the rectification application be disposed of on proper grounds after considering the supporting documents/records available on the portal as was said to have been uploaded by the petitioner. The order was to be delivered within fifteen working days and pass an appropriate reasoned order rectifying the initial ex-parte Order dated 06.01.2025, if need be, in terms of Section 161 of the GST Act.

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