Notice for mismatch of ITC between GSTR-3B and GSTR-2A not received hence matter remanded: Madras HC

Ram Enterprises Vs Asst. Commissioner (ST) (Madras High Court)

Madras High Court held that notice for mismatch of the input tax between GSTR 3B with that of GSTR-2A is not received by the petitioner hence order set aside and matter remanded back for fresh consideration.

Facts- The case of the petitioner is that they are registered under the GST law. The petitioner is in the business of retail trading in Hardware goods. Proceedings were initiated by the respondent for mismatch of the input tax between GSTR 3B with that of GSTR-2A for the year 2017-18. According to the petitioner, the order has been passed without affording any opportunity to the petitioner and that the petitioner is having sufficient materials to show that there was no mismatch and that the petitioner has correctly availed input tax credit and eligible for the entire amount of ITC claimed by them.

Conclusion- Held that notice was issued by the respondent but however, the petitioner did not receive the same. On going through the impugned order, it is seen that a total tax liability of Rs.7.51 lakhs has been imposed against the petitioner. The petitioner has come up with a clear case that there are sufficient materials/documents to substantiate the defense of the petitioner to the effect that there was no mismatch of the input tax claim between GSTR3B and GSTR-2A. Thus, the impugned order passed by the respondent dated 15.12.2023, is hereby set aside.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

Considering the limited issue involved in this writ petition, the main writ petition itself is taken up for final hearing on consent given by either side.

2. This writ petition has been filed challenging the impugned order passed by the respondent in GSTIN 33AAMFR9785P1Z1/2017-18 dated 15.12.2023.

3. The case of the petitioner is that they are registered under the GST law with GSTIN 33AAMFR9785P1Z1. The petitioner is in the business of retail trading in Hardware goods. The further case of the petitioner is that proceedings were initiated by the respondent for mismatch of the input tax between GSTR 3B with that of GSTR-2A for the year 2017-18. According to the petitioner, the order has been passed without affording any opportunity to the petitioner and that the petitioner is having sufficient materials to show that there was no mismatch and that the petitioner has correctly availed input tax credit and eligible for the entire amount of ITC claimed by them. It is under these circumstances, the present writ petition has been filed before this Court.

4. The learned Government Advocate (Tax) appearing on behalf of the respondent submitted that in the instant case, the petitioner was given an opportunity and the petitioner also submitted a reply dated 13.9.2023. Therefore, it was contended that the petitioner did not properly avail the opportunity and therefore the order does not suffer from any illegality and consequently, this writ

5. The learned counsel for the petitioner submitted that he has received specific instructions that no such reply was given by the petitioner and in any case, the so called reply that has been pointed out by the learned Government Advocate (Tax) runs to only two lines without any eloborateexplanation on the side of the petitioner with supporting documents.

6.In the instant case, it is seen that notice was issued by the respondent but however, the petitioner did not receive the same. On going through the impugned order, it is seen that a total tax liability of Rs.7.51 lakhs has been imposed against the petitioner. The petitioner has come up with a clear case that there are sufficient materials/documents to substantiate the defense of the petitioner to the effect that there was no mismatch of the input tax claim between GSTR3B and GSTR-2A.

7. This Court had an occasion to deal with a similar issue in WP.No.26477 of 2024 dated 12.09.2024. This Court wanted to afford an opportunity to the petitioner therein by putting the petitioner on terms. In order to maintain consistency, a similar order can be passed in this writ petition also. In the light of the above discussion, the impugned order passed by the respondent in Reference Number in GSTIN 33AAMFR9785PZ1/2017-18 dated 15.12.2023, is hereby set aside. The matter is remanded back to the file of the respondent for fresh consideration on condition that the petitioner will pay 10% of the disputed tax amount to the respondent within a period of four weeks from today. If this condition is not complied with, the order passed by the respondent will stand automatically revived. On compliance with the said condition, the petitioner will file their reply/objection along with all the relevant documents within a period of two weeks thereafter. The respondent shall thereafter issue fresh notice to the petitioner and afford opportunity of personal hearing and pass final orders within a period of three months thereafter.

8. In the result, this writ petition is allowed with the above directions. No costs. Consequently, connected miscellaneous petitions are closed.