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.
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