Case Law Details
Subh Sri Agencies Vs Deputy State Tax Officer (Madras High Court)
In a recent case before the Madras High Court, Subh Sri Agencies challenged an assessment order dated 04.07.2023, highlighting a significant disparity between their GSTR 3B returns and GSTR 2B statements. The crux of the issue lay in the Input Tax Credit (ITC) claim concerning customs duty. Despite the petitioner’s explanation in their response dated 17.03.2023, the tax demand was confirmed under the impugned order.
The petitioner’s counsel emphasized that the discrepancy stemmed from the ITC claimed on customs duty, which was not duly considered. The petitioner, willing to cooperate, agreed to remit 10% of the disputed tax demand as a condition for remand.
Responding to the petitioner’s plea, T.N.C. Kaushik, learned Additional Government Pleader, pointed out that the impugned order was issued within the statutory limitation for filing an appeal.
The petitioner’s reply of 17.03.2023 had elaborated on the disparity between their GSTR 3B return and GSTR 2A/2B return, attributing it to the customs duty. However, the impugned order disregarded this explanation, citing a lack of relevant documents. Recognizing the need for fairness, the Court quashed the order, subject to the condition of remitting 10% of the disputed tax demand within two weeks.
Furthermore, the petitioner was granted the opportunity to submit relevant documents supporting their ITC claim within the stipulated period. Upon satisfaction with the remittance and document submission, the respondent was directed to provide a reasonable opportunity for the petitioner to present their case, including a personal hearing, and subsequently issue a fresh order within two months.
In conclusion, the case of Subh Sri Agencies Vs Deputy State Tax Officer underscores the importance of considering explanations provided by taxpayers and ensuring procedural fairness in tax assessments. The Court’s intervention serves as a safeguard against unjust tax demands, promoting transparency and adherence to principles of natural justice in the realm of tax administration.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
PRAYER: Writ Petition filed under Article 226 of the Constitution of India, pleased to issue a Writ of Certiorari, to call for the impugned proceedings of the respondent in GSTN: 33AGWPD2341K1ZC / 2020-2021 dated 04.07.2023 and the summary of the order dated 04.07.2023 in Form GST DRC-07 both issued in Reference No. ZD330723009964B passed under Section 73 of the CGST Act, 2017 and TNGST Act, 2017 and quash the same as passed without considering the objections dated 17.03.2023 and also contrary to the provisions of the CGST Act, 2017 and TNGST Act, 2017 and in violation of principles of natural justice.
An assessment order dated 04.07.2023 is the subject of challenge. The petitioner received a show cause notice pertaining to the disparity between the GSTR 3B returns of the petitioner and the GSTR 2B statement. By reply dated 17.03.2023, the petitioner pointed out that such difference is on account of the Input Tax Credit claim in respect of customs duty. In spite of such response, the petitioner states that the tax demand was confirmed under the impugned order.
2. Learned counsel for the petitioner refers to the reply dated 17.03.2023 and points out that the Input Tax Credit claimed in respect of customs duty explains the disparity between the GSTR 3B and GSTR 2A / 2B returns. Since the reply was not duly taken into account, he submits that the impugned order warrants interference. On instructions, learned counsel submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
3. T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for the respondent. He points out that the impugned order was issued on 04.07.2023 and that the period of limitation for filing an appeal expired.
4. In the reply of 17.03.2023 the disparity between the GSTR 3B return and GSTR 2A / 2B return has been explain and pointing out that the replies arose in the income tax of the customs duty. In the impugned order, the said explanation was aside on the ground that relevant document to produce to prove the statement. In the facts and circumstances, albeit by putting the petitioner on terms, the petitioner should be provided an opportunity to contest such claim.
5. Solely for such reason, the order impugned herein is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit documents in respect of the Input Tax Credit availed of by the petitioner within the aforesaid period. Subject to receipt thereof and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of the petitioner’s documents.
W.P.N6. o.8468 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.9420 and 9422 of 2024 are closed.
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