In recent case of M/s Sterling & Wilson Pvt. Ltd. Vs COMMISSIONER, ODISHA, COMMISSIONERATE OF CT GST & ORS. GSTAT head that At the initial period of return filing Return filing processes were largely manual, and the system of complete online filing with auto-population was not fully operational. Consequently, the possibility of inadvertent human error cannot be ruled out. Considering the possibility of error, matter is remanded by for fresh adjudication.
Background
The Appellant, M/s Sterling and Wilson Private Limited, is engaged in the business of engineering, procurement and construction (EPC) services and is duly registered under the Goods and Services Tax laws. The Appellant–Taxpayer has challenged the First Appellate Order by Additional Commissioner of CT & GST (Appeal) confirming the demand of Tax on account of GSTR 1 and GSTR 3B mismatch.
First Appellate Authority held that there is no establishment of any intention of the tax payer to evade tax by act of fraud or suppressing the facts to evade tax , However, first Appellate Authority further held that Appellant could not prove that ITC passed by the Appellant to the Recipients were not utilised. Hence, the Appellate Authority treated it to be a case under Section 73(9) of the CGST/SGST Act.
Observation by GSTAT.
the first Appellate Authority while setting aside the penalty imposed by the Proper Officer under Section 74 of CGST Act came to the conclusion (as underlined above) that in the absence of establishment of any intention of the taxpayer to evade tax by way of fraud or suppressing the facts, as the appellant has disclosed the same in debit/credit notes, supported with invoices duly accounted for in books of accounts but did not disclose it in periodical returns matching with total liability in annual return correctly and could not prove the ITC passed by the appellant to the recipients are not utilised.
First Appellate Court has accepted that the Appellant has disclosed the transaction in Debit / Credit notes and are supported with invoices duly accounted in books of Account. But his fault was that he did not disclose the transactions in the periodical returns matching with total liability in annual returns correctly.
GSTAT are of the opinion that CGST / SGST Act is relatively new Act and professionals may not be thorough in the filing returns at the relevant period, together with fact that, at that particular time most of returns were being filed manually and the technique of auto-population and full online filling was not operational to fullest extent as it is now. There were chances of human error. In order to obviate any such human error, the matter should be re-considered by the learned Proper Officer.
Conclusion by GSTAT
GSTAT set aside the order passed by the Proper Officer and the order passed by the First Appellate Authority, so far as it relates to treating the case as Section 73 of the CGST/SGST Act are concerned, however upheld the finding that case does not come under Section 74 of SGST / CGST
Also, remand the matter back to learned Proper Officer for re-consideration of matter giving liberty to the Appellant to file appropriate amendment petition.
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