Case Law Details
A. Ansari Abu Agencies Vs Superintendent of GST and Central Excise (Madras High Court)
The Madras High Court recently rendered a significant judgment in the case of A. Ansari Abu Agencies Vs Superintendent of GST and Central Excise. The court addressed a crucial issue concerning tax liability arising from discrepancies between GSTR-1 and GSTR-3b returns.
The crux of the matter lies in the inadvertent error made by the petitioner while filing GSTR-1, wherein details of the same invoice were provided more than once. Despite rectifying this error in the GSTR-3b return and providing certificates from purchasers confirming non-availment of input tax credit (ITC) on duplicate invoices, the petitioner faced tax liability.
The court critically examined the impugned order, highlighting that the petitioner’s explanation was disregarded solely because the GSTR-1 statement was not amended before March 2019. However, considering the evidence submitted, the court deemed it necessary to reassess whether purchasers indeed did not claim excess input tax credit.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 17.12.2023 pertaining to the mismatch between the petitioner’s GSTR 1 and GSTR 3B returns is under challenge in this writ petition.
2. As a registered person under applicable GST enactments, the petitioner filed a return in GSTR 1 in relation to outward supplies in the assessment period 2017-18. While doing so, the petitioner asserts that an error was committed by providing details pertaining to the same invoice more than once. Upon receipt of an intimation regarding such discrepancies, the petitioner replied thereto by stating that it was an inadvertent error and that the correct details are contained in the petitioner’s GSTR 3B return. A similar reply was also sent upon receipt of the show cause notice. In addition, the petitioner obtained certificates from each of the relevant purchasers of goods. In those certificates, the purchasers stated that they had availed of input tax credit (ITC) by excluding the duplicate invoices and that this is reflected in their GSTR 2A returns. The impugned order was issued in these facts and circumstances.
3. By referring to the certificates issued by the petitioner’s purchasers, learned counsel contends that tax liability has been imposed on the petitioner for an inadvertent error although no revenue loss was suffered on such account.
4. Mohanamurali, learned senior standing counsel, accepts notice on behalf of the respondent. By referring to the impugned order, he submits that the petitioner failed to rectify the GSTR 1 statement within the prescribed time limit, including the extended time in such regard. Therefore, he contends that the impugned order contains no infirmity.
5. The documents on record include the replies of the petitioner to the intimation and show cause notice. In the reply to the show cause notice, the petitioner has asserted that an inadvertent error was committed while filing GSTR 1 return and enclosed confirmation letters from the purchasers concerned. Each purchaser has certified that such purchaser did not avail of ITC in respect of the duplicate invoices and that this is evidenced by the auto-populated GSTR 2A return.
6. In the impugned order, in relevant part, it was concluded as under:
“8.2 The tax payable reported in excess in GSTR-1 was the self-assessed liability arrived by reporting the invoice wise details in B2B Category apart from consolidated reporting of B2C Supplies. Further, the taxpayer has not amended the GSTR-1 reporting pertaining to the period Financial year 2017-18 for which the facility to amend the same was extended up-to the due date of GSTR-3B of March-19. Hence the contention of the taxpayer at this stage that the said supplies were wrongly reported in GSTR-1 is not acceptable and furnishing of certificates from the recipient to the effect that ITC involved in those supplies were not availed is an after-thought initiation of action by the department.
The above extract discloses that the petitioner’s explanation was disregarded as unacceptable and as an after-thought merely on the ground that the petitioner did not amend the GSTR 1 statement on or before March 2019. In the face of the documents submitted by the petitioner, the matter requires reconsideration so as to ascertain whether the purchasers indeed did not avail of excess input tax credit on the basis of the duplicate invoices. For such reason, the impugned order call for interference.
7. Accordingly, the impugned order dated 17.12.2022 is set aside and the matter is remanded for reconsideration. 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 two months from the date of receipt of a copy of this order. Consequently, connected miscellaneous petitions are closed. No costs.
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