Case Law Details
Oasys Cybernetics Private Limited Vs State Tax Officer (Madras High Court)
Summary: The Madras High Court, in the case of Oasys Cybernetics Private Limited vs. State Tax Officer (W.P. No. 16224 of 2024, dated July 9, 2024), addressed a dispute where Input Tax Credit (ITC) reflected in GSTR-2A was not considered during the assessment process. The petitioner, M/s. Oasys Cybernetics, contested an adjudication order dated March 7, 2024, alleging the failure to acknowledge 11 bills of entry auto-populated in GSTR-2A. This oversight led to an erroneous tax demand of ₹77,59,284. The petitioner’s counsel argued that this discrepancy arose due to mismatched data from the GST Model-2 portal, which the petitioner could not access, and sought a reassessment. The court noted that the 11 bills of entry, corresponding to the disputed ITC, warranted reconsideration. While the tax department claimed compliance with natural justice by issuing notices and considering replies, the mismatch between ICEGATE data and the GSTR-2A records was deemed significant. To resolve the matter, the court set aside the impugned order on the condition that the petitioner remits ₹8,00,000 as part of the disputed tax demand within four weeks. Post-payment, the tax authority was instructed to conduct a fresh adjudication, providing the petitioner with a personal hearing and finalizing the revised order within three months. This decision underscores the importance of accurate ITC reconciliation in GST assessments and reinforces the obligation of tax authorities to thoroughly evaluate GSTR-2A records before confirming tax demands. The court’s directive aims to ensure fair assessment and compliance with principles of natural justice.
Introduction: The Hon’ble Madras High Court in the case of M/s. Oasys Cybernetics Private Limited v. State Tax Officer, Chennai [W.P. No. 16224 OF 2024 dated July 09, 2024] disposed the writ petition by setting aside the order in case where the credit as reflected in GSTR-2A was not taken into consideration at the time of passing of order.
Facts:
M/s. Oasys Cybernetics Private Limited (“the Petitioner”) filed a writ petition challenging the order dated March 07, 2024 (“the Impugned Order”) alleging that the credit reflected in GSTR-2A was not taken into consideration.
Issue:
Whether order is liable to be set aside when the credit reflected in GSTR-2A was not taken into consideration?
Held:
The Hon’ble Madras High Court in the case of W.P. No. 16224 OF 2024 held as under:
- Noted that, the bill of entry reflected in GSTR-2A were not taken into consideration at the time of passing of the order.
- Opined that, tax demand has to be reconsidered.
- Held that, the Impugned Order is set aside and matter is remitted back for reconsideration.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original dated 07.03.2024 is challenged in this writ petition on the ground that Input Tax Credit (ITC) reflected in GSTR 2A was not properly taken into consideration. Pursuant to the scrutiny of the petitioner’s returns, notice in Form ASMT 10 was issued on 17.08.2023. This was followed by show cause notice dated 19.09.2023. The petitioner replied to such show cause notice on 18.10.2023 and 23.01.2024. The impugned order was issued thereafter.
2. Learned counsel for the petitioner submits that the order of adjudication refers to amounts not reflected in the GST Model-2 portal. He submits that such information was not made available to the petitioner and that the petitioner has no access thereto. He also submits that the GSTR 2A reflects 11 bills of entry and amounts corresponding thereto. To that extent, he submits that the confirmed tax proposal is erroneous and warrants reconsideration.
3. Mr. T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for the respondent. He submits that principles of natural justice were complied with by informing the petitioner of discrepancies by issuing notice in Form ASMT 10 dated 17.08.2023. He also submits that the replies of tax payer to the show cause notice were duly considered. He also points out that information relating to the mismatch was received from ICEGATE. As regards the Model-2 portal, he submits that this is a source of information for the GST Department.
4. The petitioner has placed on record screen shots from the GST portal in respect of the auto-populated GSTR 2A. The said document reflects details of 11 bills of entry. As regards such 11 bills of entry, the confirmed tax demand warrants reconsideration. Upon excluding the tax component relating to the said 11 bills of entry, the disputed tax demand is about Rs.77,59,284/-. Learned counsel for the petitioner, on instructions, submits that the petitioner agrees to remit a sum of Rs.8,00,000/- towards the disputed tax demand as a condition for remand.
5. For reasons aforesaid, the impugned order dated 07.03.2024 is set 3/6 aside on condition that the petitioner remits Rs.8,00,000/- (Rupees Eight lakhs only) towards the disputed tax demand as agreed to within a period of four weeks from the date of receipt of a copy of this order. Subject to being satisfied about the receipt of the said sum, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of three months from the date of receipt of the above sum from the petitioner.
6. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
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