Case Law Details
R.S Marketing and Logistics Private Limited Vs Commercial Tax Officer (Karnataka High Court)
Fresh Opportunity of hearing be granted when guidelines prescribed in Circular relating to discrepancies in Form GSTR-3B and Form GSTR-2A for claiming of ITC has not been complied with
The Hon’ble Karnataka High Court in the case of R.S Marketing and Logistics Private Ltd. v. Commercial Tax Officer [W.P No. 7295 of 2024 dated June 05, 2024], set aside the adjudication order and remanded the matter back for reconsideration wherein the guidelines prescribed in Circular No.183/15/2022-GST dated 27.12.2022 (“the Circular”) relating to discrepancies in Form GSTR-3B and Form GSTR-2A for claiming of ITC has not been complied with.
Facts:
R.S Marketing and Logistics Private Limited (“the Petitioner”), filed a writ petition against an order dated May 2, 2023 (“the Impugned Order”) passed by the Revenue department (“the Respondent”) guidelines prescribed in the Circular relating to discrepancies in Form GSTR-3B and Form GSTR-2A for claiming of ITC
Issue:
Whether the Petitioner entitled to an opportunity of hearing when the procedure prescribed in the Circular relating to discrepancy in Form GSTR-3B and Form GSTR-2A has not been complied with?
Held:
The Hon’ble Karnataka High court in W.P. No. 7295 of 2024 held as under:
- Noted that, the Circular is made applicable specifically w.r.t. FY 2017-2018 and procedure has been prescribed in case where the ITC claimed is less than five lakh rupees.
- Opined that, the procedure prescribed in the Circular has not been complied with by the Respondent.
- Held that, the Impugned Order is set aside and remitted the matter back for reconsideration.
The Karnataka High Court’s decision in R.S Marketing and Logistics Private Ltd. v. Commercial Tax Officer underscores the critical importance of adhering to procedural guidelines set forth in tax regulations. This ruling not only ensures fair treatment for the Petitioner but also reinforces the necessity for tax authorities to follow prescribed procedures meticulously.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
Petitioner has filed the present petition seeking for setting aside of the order of adjudication bearing Reference No. CTO/LGSTO-51/LR/D&R-04/2023-24 dated 02.05.2023 passed by the respondent, copy of which is produced at Annexure-A.
2. It is the case of the petitioner that there were certain discrepancies between the ITC claimed as per GSTR-3B and GSTR-2A and noticing such discrepancies, the Authority has adjudicated and directed excess claim of ITC to be reversed.
3. It is the case of the petitioner that they were not given sufficient opportunity to explain the discrepancies. However, it is submitted that irrespective of the stand taken by the assessee, in light of the Circular No.183/15/2022-GST dated 27.12.2022 issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing, wherever there is discrepancy in GSTR-3B and GSTR-2A, procedure is prescribed and in terms of the said procedure, the adjudicating authority ought to have followed the said procedure and non-following of such procedure has caused prejudice and accordingly, it is submitted that the matter may be remitted back for fresh consideration to the Authority, taking note of the Circular referred to above.
4. Sri. K. Hemakumar, learned Additional Government Advocate appearing for the Revenue submits that despite the reasonable opportunity being granted, the same has not been availed as is clear from the impugned order. It is further submitted that insofar as the Circular relied upon by the petitioner, the same was not relied upon in the adjudication proceedings.
5. Heard both sides.
6. For the limited purpose of the present matter, it is to be noticed that the table enclosed in the adjudication order would indicate that there is discrepancy between the ITC claimed as per GSTR-3B and GSTR-2A. The Authority has disallowed such claim only on the ground of discrepancy. It must be noticed that Circular No.183/15/2022-GST dated 27.12.2022 is made applicable specifically with respect to the financial year 2017-18 as is the case herein. It is further to be noticed that where the difference of ITC claimed is less than Rs.5,00,000/-, procedure is prescribed in Paragraph No. 4.1.2. Further directions are also made out at paragraph No. 4. It is clear as per Paragraph No. 6 of the Circular that the procedure to be followed is as regards all matters pending for adjudication as regards the financial year 2017-18 and 2018-19. If that were to be so, the adjudicating authority ought to have taken note of the Circular irrespective of whether the petitioner had raised such contention.
7. Accordingly, this Court is of the prima facie view that the Circular is applicable to the present facts and on such ground, the adjudication order is set aside. In so far as the contention of counsel for revenue that the applicability of the circular may also depend on the facts of the case, the said aspect is left open to be decided upon remand. The order of sending the matter back to the authority is being passed also keeping in mind the request of the petitioner to be given one more opportunity to put forth their case before the Authority.
8. Accordingly, the order at Annexure-A is set aside. The matter is remitted back for fresh consideration in terms of the observations made above. By virtue of setting aside of the adjudication order, petitioner is given another opportunity to participate in the proceedings. The petitioner who has been granted an opportunity of being heard once again, is to make an additional deposit of 10% of the tax amount as determined in the adjudication order dated 02.05.2023.
9. Accordingly, the petition is disposed off.
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