Case Law Details
Parthasarathy Narasimhan Vs Deputy Commercial/State Tax Officer (Madras High Court)
The recent judgment by the Madras High Court in the case of Parthasarathy Narasimhan vs. Deputy Commercial/State Tax Officer highlights a significant issue stemming from an error in GSTR-1 turnover reporting. The petitioner contested an assessment order that imposed a substantial tax liability, arguing that the reported turnover was inaccurately high due to an inadvertent error.
The petitioner, a registered entity under GST enactments, discovered that their turnover was erroneously reported in the GSTR-1 return as Rs. 9,22,89,895/- instead of Rs. 92,28,895/-. This reporting error led to a hefty tax liability of Rs. 1,48,20,834/-. Despite the petitioner’s subsequent representation clarifying the error and providing evidence supporting the correct turnover, the authorities proceeded with the assessment order without granting an opportunity for contestation.
In response, the Madras High Court intervened, noting the petitioner’s plea and the substantial disparity between the reported and actual turnover figures. The court found merit in the petitioner’s argument that the entire tax liability arose due to the erroneous reporting in the GSTR-1 return. Consequently, the court quashed the assessment order and remanded the matter for reconsideration, emphasizing the importance of providing the petitioner with a fair opportunity to contest the tax demand.
The judgment of the Madras High Court in Parthasarathy Narasimhan vs. Deputy Commercial/State Tax Officer serves as a reminder of the potential consequences of errors in GST reporting. Beyond merely rectifying mistakes, this case underscores the necessity for authorities to afford taxpayers the chance to present their case and rectify discrepancies before imposing substantial tax liabilities.
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