HC Sets Aside GST Order for non-consideration of Reply to Discrepancies

Impugned Order liable to be set aside when reply filed by the Assessee in response to the discrepancies raised in returns has not been taken into consideration

The Hon’ble Madras High Court in Perfect Assayers (P.) Ltd. v. State Tax Officer (ST) [W.P. No. 12083 of 2024 dated June 03, 2024] allowed the writ petition and set aside the Order-in-Original and Show Cause Notice when reply filed by the Assessee in response to the discrepancies raised in returns has not been taken into consideration.

Facts:

Perfect Assayers (P.) Ltd. (“the Petitioner”) has filed a writ petition against the Order-in-Original dated September 28, 2023 (“the Impugned Order”) passed by the Revenue Department (“the Respondent”) on the ground that the reply to Show Cause Notice dated April 27, 2023 (“the SCN”) was not taken into consideration by the officers of the Respondent. The SCN was issued alleging that there is mismatch between the Petitioner GSTR-3B return and GSTR-1 statement as well as the Petitioner GSTR-3B return and auto-populated GSTR-2A.

Issue:

Whether Impugned Order liable to be set aside when reply filed by the Assessee in response to the discrepancies raised in returns has not been taken into consideration?

Held:

The Hon’ble Madras High Court in W.P. No. 12083 of 2024 held as under:

• Opined that, the Operative part of the Impugned Order is bereft of any proper reasoning as the explanation provided in relation to discrepancies as per the SCN by way of reply filed has not been taken into consideration and has not discussed properly the explanation and recorded the reason for rejecting the Impugned Order.
• Held that, the Impugned Order is set aside and the matter is remanded back for reconsideration.

Conclusion: The Madras High Court’s decision underscores the importance of procedural adherence in tax disputes. By remanding the case for reconsideration, the court reaffirmed that tax authorities must thoroughly evaluate an assessee’s explanations before issuing orders, ensuring a fair and just adjudication process under the law.

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