Case Law Details
Ford India Private Limited Vs Deputy Commissioner (ST-III) (Madras High Court)
In the case of Ford India Private Limited vs. Deputy Commissioner (ST-III) (Madras High Court), the Madras High Court addressed issues related to an assessment order dated 18.03.2024 that was challenged primarily on the grounds of being unreasoned. Here’s a detailed summary of the judgment delivered by the Madras High Court:
Background:
Proceedings were initiated against Ford India Private Limited for the assessment period 2018-19 under two separate show cause notices, both dated 27.12.2023. Following the petitioner’s reply dated 25.01.2024, one set of proceedings was dropped, while the other proceeded to culminate in the assessment order that was contested.
Petitioner’s Arguments: 2. The petitioner contended that in their reply to the show cause notice, they had explained discrepancies related to input tax credit, particularly highlighting that the credit availed was lower than what was available in the auto-populated GSTR-2A. They argued that GSTR-2A data is dynamic and may not always reflect accurate figures due to delays in supplier filings, which was acknowledged by the CBIC (Central Board of Indirect Taxes and Customs) in a press release dated 03.07.2019.
Government Advocate’s Response: 3. Mr. V. Prashanth Kiran, appearing for the respondent, suggested that the matter be remanded for reconsideration, allowing the assessing officer to reevaluate the issue concerning the mismatch in tax credits.
Court’s Observations: 4. Upon reviewing the impugned order, the court noted that while the taxpayer’s reply had been considered, the order confirming the tax proposal did not provide any reasoning to justify its conclusions. The lack of reasons rendered the order unsustainable under legal scrutiny.
Court’s Decision: 5. The Madras High Court set aside the assessment order dated 18.03.2024 and remanded the matter back to the assessing officer for reconsideration. The court directed the respondent to afford the petitioner a reasonable opportunity, including a personal hearing, and instructed that a fresh order be issued within three months from the receipt of the court’s order. All legal contentions were left open for the petitioner to pursue.
Additionally, due to the setting aside of the assessment order, any bank attachments related to the order were lifted.
In concluding the matter (W.P. No. 16990 of 2024), the Madras High Court disposed of the case on the above terms, without imposing any costs on either party.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An assessment order dated 18.03.2024 is assailed on the ground that it is unreasoned.
2. Proceedings were initiated against the petitioner in respect of assessment period 2018-19 under two show cause notices each dated 27.12.2023. Pursuant to the petitioner’s reply dated 25.01.2024, by order dated 18.03.2024, proceedings bearing reference No .ZD3 3032410991 9B were dropped. The proceedings under the other show cause notice were proceeded with and such proceedings culminated in the impugned assessment order.
3. Learned counsel for the petitioner referred to the petitioner’s reply and pointed out that the petitioner had explained that the input tax credit availed of was lower than that available in the auto-populated GSTR-2A. She further submits that the auto-populated GSTR-2A is dynamic inasmuch as it reflects data uploaded by the supplier concerned in the GSTR-1 statement and GSTR-3B on an ongoing basis. She submits that the impugned proceedings were initiated by comparing the data in Table 8A of the annual return in GSTR-9 with the auto-populated GSTR-2A. By relying on the press release dated 03.07.20 19 from the CBIC, learned counsel submits that the Board was conscious of the fact that it is likely that there will be a mismatch between the data in Table 8A and the auto-populated GSTR-2A.
4. Mr. V. Prashanth Kiran, learned Government Advocate, appears on behalf of the respondent. He submits that the matter may be remanded for reconsideration by leaving it open to the assessing officer to decide the issue relating to mismatch.
5. On perusal of the impugned order, it is evident that the tax payer’s reply was extracted and, thereafter, without assigning any reasons, the tax proposal was confirmed. In the absence of reasons in support thereof, the impugned order cannot be sustained.
6. For reasons set out above, the impugned order dated 18.03.2024 is set aside and the matter is remanded for reconsideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of a copy of this order. All contentions are left open to the petitioner. In view of the assessment order being set aside, the bank attachment is raised.
7. W.P.No.16990 of 2024 is disposed of on the above terms without any order as to costs. Consequently, the connected miscellaneous petitions are also closed.
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