Sterling & Wilson Pvt. Ltd. Vs Commissioner, Odisha Commissionerate of CT & GST & Ors. (GSTAT)
The present second appeal was filed under Section 112 of the Central Goods and Services Tax Act, 2017 against the order of the First Appellate Authority relating to Financial Year 2018–19. The Appellant, engaged in engineering, procurement and construction (EPC) services, challenged the demand arising from an alleged mismatch between tax liability declared in GSTR-1 and GSTR-3B.
For FY 2018–19, the Appellant declared output tax liability of ₹31,36,18,763/- in GSTR-1, whereas ₹31,09,12,131/- was declared in GSTR-3B, resulting in an alleged short disclosure of ₹27,06,634/-. The Proper Officer, invoking Section 74 of the CGST/SGST Act, raised demand of tax along with interest and equivalent penalty. The First Appellate Authority partly allowed the appeal by holding that there was no intention to evade tax by fraud or suppression. It converted the proceedings from Section 74 to Section 73, confirmed the tax demand of ₹27,06,634/- and interest, and reduced the penalty to 10% of the tax under Section 73(9).
The Appellant contended before the Tribunal that the difference arose due to issuance of credit notes, debit notes, and advance adjustments pertaining to different tax periods, which could not be amended in GSTR-1 due to system constraints. These adjustments were reflected in books of accounts and GSTR-3B. It was argued that the issue was reconciliatory in nature, without suppression or fraudulent intent. Detailed reconciliation statements were produced, explaining the difference of ₹27,06,637/- through adjustments relating to advances, debit notes, and credit notes issued to various customers.
