Summary: GSTR 9 and GSTR 9C are crucial components of GST compliance, consolidating annual business transactions and reconciling financial data. While GSTR 9 is an annual return, GSTR 9C acts as a reconciliation statement, mandatory for taxpayers with an annual turnover exceeding ₹5 crores. Various judicial rulings emphasize their significance. For instance, the Madras High Court in Sri Shanmuga Hardwares Electricals directed reconsideration of ITC claims based on GSTR-9, highlighting that assessing officers must examine all relevant documents rather than solely relying on GSTR-3B. Similarly, the Calcutta High Court in Ankit Kumar Agrawal stressed that excluding timely filed GSTR-9 could prejudice taxpayers’ rights. Cases like L&T Finance Limited and Sri Sakthi Steel highlight procedural lapses, such as ignoring filed returns or failing to grant hearings, resulting in remand for fresh decisions. On GSTR-9C, the Calcutta High Court in Sanjeevani Gum Udyog clarified that discrepancies addressed through GSTR-9C must be considered before adjudication. These rulings underscore the necessity for accurate filing and adherence to procedural fairness in GST compliance.
Background
GST has been implemented in India from 1st July, 2017. Under the new GST regime, more than Rs. 1.32 Cr. Business in India have been Registered and issued GST Registration. Barring few exceptions, all entities having GST registration are required to file GST annual returns, irrespective of business activity or sales or profitability during the return filing period.
GST registrants who obtained or held registration anytime during a given financial year are required to file annual return for the sain financial year. The annual return is a compilation return which includes all business transactions corresponding to a financial year. It consolidates the information furnished by a taxpayer in monthly/ quarterly returns filled during the financial year. It is important to know who has to file Annual Return i.e. GSTR 9 and GST Audit i.e. GSTR 9C which is not a return but a Declaration has be filled by Persons notified by CGST and SGST Rules.
Persons liable for filling Annual Return
As per Section 44 of CGST Act, 2017, every registered person is required to file Annual Return except the following:
(a) An Input Service Distributor;
(b) A person paying tax under Section 51 (i.e. TDS Deductor);
(c) A person paying tax under Section 52 (i.e. TCS Deductor);
(d) A Casual Taxable Person
(e) A Non-Residential Taxable Person
Types of Annual Return
As per Rule 80 of CGST Rules, 2017 Following types of Annual Returns are Prescribed:
| Prescribed Form | Persons Liable for Filling |
| Form GSTR-9 | All Regular Taxpayer |
| Form GSTR -9A | All Composition Taxpayer |
| Form GSTR-9B | All E-commerce Operators |
| Form GSTR-9C | Every registered taxpayer whose Aggregate Annual Turnover during FY Exceeds Rs.5 Cr. |
Now, the Form GSTR-9A is not required to be filled w.e.f. FY 2019-20 due to Introduction of Annual Form GSTR-4 and GSTR-9C is a reconciliation statement which is now required to be self-certified by the registered person i.e. Tax payer from FY 2020-21 onwards.
Various Pronouncement of Judiciary on Annual Return (GSTR 9)
Let’s discuss the pronouncements of Various High Courts their view on Annual Return i.e. GSTR 9.
Facts
Section 16 of the CGST Act, 2017—ITC —
The Petitioner challenged assessment orders, each dated 30.09.2023, in respect of assessment years 2017-2018, 2018-2019 and 2019-2020.The petitioner asserted that nil returns were erroneously and inadvertently filed in the GSTR-3B return and he is eligible for ITC in each of the above mentioned assessment periods and that this is duly reflected in the GSTR-2A returns. Consequently, GSTR-9 (annual) returns were filed duly reflecting the ITC claims of the petitioner. The court observed that when the petitioner asserted that he is eligible for ITC by referring to GSTR-2A and GSTR-9 returns, the assessing officer should examine whether the ITC claim is valid by examining all relevant documents. In this case, the claim was rejected entirely on the ground that the GSTR-3B returns did not reflect the ITC claim.
Issues Involved
It appears that the ITC claim was rejected entirely on the ground that the GSTR-3B returns did not reflect the ITC claim.
Court’s Observation
When the registered person asserts that he is eligible for ITC by referring to GSTR-2A andGSTR-9 returns, the assessing officer should examine whether the ITC claim is valid by examining all relevant documents, including by calling upon the registered person to provide such documents. In this case, it appears that the claim was rejected entirely on the ground that the GSTR-3B returns did not reflect the ITC claim. Therefore, interference is warranted with the orders impugned herein.
Decision
The Hon’ble High Court quashed the order and remanded the matter for re-consideration. The petitioner shall submit all relevant documents to the assessing officer within a maximum period of two weeks. Upon receipt thereof, the assessing officer is directed to provide a reasonable opportunity to the petitioner, and thereafter issuing a fresh order within a maximum period of two months.
Facts
Section 73 of the CGST Act, 2017 – Order -This intra-Court appeal is directed against the order dated 4th April, 2024, by which the challenge to the adjudication order passed by the authority dated 15th December, 2023 was rejected directing the appellant to avail the statutory appellate remedy. The court observed that GSTR-9 being an annual return filed within the extended period of limitation viz., upto 7th February, 2020 on account of various notifications issued by the Government due to the Covid pandemic. If the GSTR-9, is not considered, the assessee’s rights would be greatly prejudiced. Further, the entire matter is revenue neutral.
Issue Involved
Hon`ble Court is inclined to remand the matter back to the adjudicating authority viz., the Assistant Commissioner to consider the submissions made by the assessee, afford an opportunity of personal hearing, examine the annual return filed in GSTR-9 and proceed to take a fresh decision on merits and in accordance with law.
Court Observation
In the court considered view, two aspects have appealed the court to send back the matter to the adjudicating authority. First is with regard to the effect of GSTR-9. This being an annual return filed within the extended period of limitation viz., upto 7th February, 2020 on account of various notifications issued by the Government due to the Covid pandemic. Therefore, if the GSTR-9, which was filed within time is not considered, the assessee’s rights would be greatly prejudiced. The second aspect, which has persuaded us is the contention of the assessee that the entire matter is revenue neutral.
Decision
The Hon’ble High Court remanded the matter back to the adjudicating authority to consider the submissions made by the assessee, afford an opportunity of personal hearing, examine the annual return filed in GSTR-9 and proceed to take a fresh decision on merits and in accordance with law.
3. L & T Finance Limited V/s The Assistant Commissioner, Chennai [2024] 71 TAXLOK.COM 060 (Madras) W.P.NO. 9652 OF 2024 Dated 12/04/2024
Facts
Section 73/74 of the CGST Act, 2017- Order -The petitioner challenged the Assessment order dated 31.12.2023 is assailed primarily on the ground of breach of principles of natural justice. The court observed that although the order refers to a personal hearing notice issued on 31.12.2023, there is nothing on record to indicate that such personal hearing notice was issued. The petitioner explained the difference in turnover in its reply. This aspect has not been noticed in the impugned order.
Issues Involved
An assessment order is assailed primarily on the ground of breach of principles of natural justice. There is nothing on record to indicate that such personal hearing notice was issued. Therefore, the impugned order is unsustainable. The impugned order is set aside and the matter is remanded for reconsideration.
Court’s Decision
The Hon’ble High Court set aside the impugned order and remanded the matter for reconsideration. The conclusions were recorded without providing a personal hearing to the petitioner. Therefore, the impugned order is unsustainable. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months.
4. Sri Sakthi Steel vs The Deputy State Tax Officer W.P. No.15179 of 2024 (Madras) Dated 19 June,2024
Facts
Annual return filed by the petitioner for assessment period 2018-19 was not taken into consideration. By issuing show cause notice dated 13.12.2022, proceedings were initiated against the petitioner. Such proceedings culminated in impugned order dated 28.02.2023 the petitioner was unaware about these proceedings because the show cause notice and impugned order were uploaded on the GST portal but not communicated to the petitioner through any other mode, the present writ petition was filed.
Learned counsel for the petitioner referred to the annual return in Form GSTR 9 and pointed out that such return was filed on 30.09.2020 with regard to assessment period 2018-19. Therefore, he points out that in spite of filing this return, it was recorded in the impugned order that the annual return had not been filed.
Court’s Observation
The petitioner has placed on record the annual return in Form GSTR 9. The return specifies the date as 30.09.2020. The return appears to have been uploaded on the same date. By the impugned order, late fee and penalty have been imposed on the petitioner for failure to file the annual return for 2018-19. Since such order was issued without taking into account the annual return filed on 30.09.2020, reconsideration is necessary.
Decision
The impugned order dated 28.02.2023 is set aside and the matter is remanded for reconsideration. The first respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of a copy of this order. In view of the impugned order being set aside, the bank attachment is raised.
Pronouncement of Judiciary on GST Audit (GSTR-9C)
Facts
The petitioner admits that there has been short deposit of the tax due to
inadvertence. The mistake was rectified by filing GSTR-9C. The same was not taken up for consideration either by the adjudicating authority or the appellate authority.
Petitioner relied upon the guidelines issued by the CBIC dated January 7, 2022 relating to the recovery proceedings. CBIC in their recovery guidelines issued on 07-Jan-2022 has instructed that there may be genuine reason for difference between the details of the GSTR-1 and GSTR-3B.
Issues Involved
The order passed by the adjudicating authority and the appellate authority are set aside and are directed to revisit the issue after taking into consideration the GSTR-9C submitted by the petitioner. An opportunity of hearing shall be given to the petitioner to place all documents in support of its claim. Accordingly, the writ petition stands disposed of.
Court’s Observation
In all such cases an opportunity needs to be provided to the concerned registered person to explain the differences between GSTR-1 and GSTR-3B, if any, and for short payment of the amount of self-assessed tax liability and interest thereon. From the documents submitted to this Court, it appears that the petitioner relied on the GSTR-9C to support the short payment it made. The same does not appear to have been considered by any of the respondent authorities. In view of the above, the order passed by the adjudicating authority and the appellate authority are set aside.
Decision
The Calcutta High Court has held that when the short payment was rectified through GSTR-9C and tax has been paid, Department has to take this into consideration before passing any adjudication order.
Epilogue
It has been Noticed that Tax Payers thinks that in the era of Digitalisation and Electronic filling of Annual Return i.e. GSTR-9 and GST Audit i.e. GSTR-9C when Annual Returns are Auto Populated on GST Portal even the various Tax Professionals and Consultants take the GSTR 9 and GSTR 9C filling very lightly. Though after filling of GSTR 1 and GSTR 3B for the Year, the Taxpayer has to file GSTR 9 and 9C as per the CGST and SGST Rules have been prescribed before the Due date to avoid Late Fees and not only that correct Reporting has to be done in GSTR 9 and 9C to avoid litigation and Future Demand which GST Authority can raise in each case.
Many a times the Adjudication authority overlooks the GSTR 9 and 9C and decides the matter under Section 73 or 74 of CGST and SGST Act, 2017 which results into Demand in Form DRC-07 and matters have been heard in various High Courts which the Hon’ble High Courts has look into the matter and reiterated time to time that Kindly take into the consideration GSTR 9 and GSTR 9C Filled on GST Portal by the Tax Payer.
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Author: Miss Zalak Sohil Dalal – Advocate| B.com, LL.B., LL.M. | Advocate & Tax Consultant, Surat.
Miss Zalak Sohilkumar Dalal, a 28-year-old practicing advocate and tax consultant based in Surat, specializes in GST and Income Tax. With over seven years of experience, she has been enrolled with the Bar Council of Gujarat and Bar Council of India since 2020. She holds a Master of Law in Human Rights from VNSGU, Surat, and has a strong academic background, including certifications in cyber law. Miss Dalal has achieved notable milestones, such as serving as a managing committee member for the Western Zone of the All India Federation of Tax Practitioners (AIFTP) for 2024-25 and delivering lectures on GST-related topics. She has also published multiple articles in reputed tax journals, focusing on GST provisions and procedural nuances. Her professional engagements extend to active participation in legal study circles and refresher courses. Additionally, she represented VNSGU in basketball at the university level during her undergraduate studies.
