Case Law Details
Tvl. Nagarajan Pavithra Vs Union of India (Madras High Court)
In a recent ruling, the Madras High Court addressed crucial aspects of GST compliance regarding the reporting of inward supplies in monthly and annual returns. The case, Tvl. Nagarajan Pavithra Vs Union of India, revolves around the petitioner’s challenge to an assessment order issued due to alleged discrepancies in tax liabilities reported under GST returns.
The petitioner, Tvl. Nagarajan Pavithra, received a show cause notice for not accurately reporting tax liabilities while filing Form GSTR 9 for the financial year 2018-2019. Specifically, the petitioner failed to include an Input Tax Credit (ITC) of Rs.5,40,185/- available in the auto-populated GSTR 2A during the said period. Consequently, a tax proposal amounting to Rs.2,71,465/- each towards CGST and SGST was confirmed against the petitioner.
During the proceedings, the petitioner argued that clerical errors in the GSTR 3B and GSTR 9 returns led to the incorrect assessment. The court considered the petitioner’s assertion that these errors were the reason for the discrepancy and were unintentional. However, the respondents, represented by Mr. Ramesh Kutty and Mr. C. Harsha Raj, contended that the petitioner’s failure to file returns within the prescribed time under Section 16(4) of the GST Act rendered them ineligible for ITC, irrespective of clerical errors.
The High Court examined whether the principles of natural justice were upheld in the issuance of the assessment order. It noted that the petitioner’s reply to the show cause notice was duly considered before finalizing the tax proposal. Despite acknowledging clerical errors, the court emphasized that the petitioner’s delay in filing returns deprived them of the entitlement to claim ITC, as per statutory provisions.
In its judgment, the Madras High Court disposed of Writ Petition No. 15713 of 2024 without costs, allowing the petitioner to pursue statutory remedies available under the law.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An assessment order dated 29.04.2024 is challenged in this writ petition. The petitioner received show cause notice dated 28.12.2023. By such show cause notice, the petitioner was called upon to show cause in respect of failure to report correct tax liability while filing the annual returns in Form GSTR 9. The petitioner replied to such show cause notice on 16.04.2024. The impugned assessment order was issued thereafter.
2. Learned counsel for the petitioner submits that the petitioner failed to report inward supply while filing the monthly returns and the annual return for financial year 2018-2019. He further submits that Input Tax Credit (ITC) of Rs.5,40,185/- was available in the auto-populated GSTR 2A. In those circumstances, he submits that the tax proposal for Rs.2,71,465/-each towards CGST and SGST was confirmed without taking these aspects into account.
3. Mr. Ramesh Kutty, learned senior standing counsel, accepts notice for respondents 1 to 3. Mr.C.Harsha Raj, learned Additional Government Pleader, accepts notice for respondents 4 to 7. Both of them submit that the petitioner is no longer entitled to ITC since the petitioner failed to file returns within the time limit prescribed in sub-section (4) of Section 16. In addition, they submit that the petitioner’s reply was taken into consideration and that principles of natural justice were complied with.
4. The petitioner has placed on record show cause notice dated 28.12.2023 and the reply dated 16.04.2024. By such reply, the petitioner asserts that both the GSTR 3B and 9 returns contained clerical errors. This reply was taken into consideration in the impugned order while confirming the tax proposal. In these circumstances, it cannot be said that principles of natural justice were violated. Consequently, I am not inclined to exercise discretionary jurisdiction.
5. For reasons set out above, W.P.No.15713 of 2024 is disposed of without any order as to costs by leaving it open to the petitioner to avail of the statutory remedy. Consequently, connected miscellaneous petitions are closed.
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