Wipro Limited Vs State of Maharashtra (Bombay High Court)
Garnishee proceedings cannot be invoked prematurely without examining the taxpayer’s explanation regarding return mismatches: Bombay High Court
In a significant move for corporate taxpayers, the Bombay High Court recently stepped in to protect Wipro Limited from what it deemed “disproportionate” recovery actions by the GST department. The case serves as a crucial reminder that procedural automation cannot override the principles of natural justice and fair play.
Facts of the case:
In this case, the petitioner challenged recovery proceedings initiated by the GST authorities. The dispute arose from supplies made during April 2021 to September 2022, in respect of which the petitioner had issued credit notes during September 2022 to November 2022. The petitioner reported these credit notes in GSTR-1 within the statutory time limits. However, the corresponding reduction in outward tax liability was not reflected in GSTR-3B at that time. Subsequently, the petitioner adjusted the tax impact of these credit notes in GSTR-3B filed in July 2023. Based on the mismatch between GSTR-1 and GSTR-3B, the department issued an intimation under Rule 88C of the Central Goods and Services Tax Rules, 2017 in Form GST DRC-01B. Thereafter, a recovery intimation was issued in Form GST DRC-01D invoking Section 75(10) read with Section 79.
