HC Directed GST Authority to Provide Another Opportunity to Assessee to Explain Difference Between GSTR-3B and GSTR-2B

Case Details: Tvl. Lakshmi Tex v. Deputy State Tax Officer-1 [2024] 160 taxmann.com 627 (Madras)

Judiciary and Counsel Details

• • Senthilkumar Ramamoorthy, J.
  • R. Sri Visvapriya for the Petitioner.
  • V. Prashanth Kiran for the Respondent.

Facts of the Case

The petitioner was a dealer of woven fabrics in cotton and ready-made garments. The department issued show cause notice to petitioner alleging that there was disparity between GSTR-3B and GSTR-2B returns. The petitioner didn’t reply to the said notice on the ground that he was awaiting particulars from his supplier.

However, the department passed the order and made entire tax liability with regard to disparity between GSTR-3B and GSTR-2B returns. It filed writ petition and contended that the petitioner did not have a reasonable opportunity to contest the tax demand.

High Court Held

The Honorable High Court noted that the petitioner was negligent in not submitting documents upon receipt of the intimation and show cause notice. Nonetheless, if the explanation of the petitioner was valid, the interest of justice would be prejudiced unless the petitioner was provided an opportunity to explain the alleged disparity.

Therefore, it was held that the impugned order was liable to be quashed subject to condition that petitioner remits 10% of disputed tax demand and department was directed to provide a reasonable opportunity to petitioner and thereafter issue a fresh assessment order.