Xiaomi Technology India Pvt Ltd Vs Additional Commissioner, CGST Delhi West Commissionerate & Ors. (Delhi High Court)
In the case of Xiaomi Technology India Pvt Ltd Vs Additional Commissioner, CGST Delhi West Commissionerate & Ors., the Delhi High Court addressed a dispute concerning the mismatch between GSTR-3B and GSTR-1 filings for the financial year 2017-18. The respondents alleged discrepancies in the taxpayer’s declarations, including differences in the reported tax liabilities and availed Input Tax Credit (ITC). They claimed a mismatch of Rs. 4,37,27,280 in tax liabilities and a significant over-claim of IGST, amounting to Rs. 15,66,77,314. The department issued a Show Cause Notice (SCN) to recover these amounts, but Xiaomi contended that they had submitted replies to prior notices and sought to clarify these differences.
The court highlighted that Section 74 of the Central Goods and Services Tax Act (CGST Act), which deals with fraud, willful misstatement, or suppression of facts, could not be invoked merely on the basis of a mismatch between GSTR-3B and GSTR-1 without evidence of such malfeasance. The court raised doubts about the application of Section 74, indicating that it should only apply if fraudulent intent or willful misrepresentation was proven. The respondents were permitted to continue with the inquiry, but any final orders were put on hold pending further hearings. The case was scheduled for the next hearing on December 16, 2024.
