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www.taxpublishers.in Central Goods and Services Tax Act, 2017, Section 73 Determination of tax--*No opportunity given to contest tax demand--Validity of* *Conclusion:* Where assessee was not given reasonable opportunity to contest tax demand, the assessment order passed was to be quashed. Revenue passed assessment order under section 73 of the Act due to disparity between GSTR-3B and GSTR- 2A returns. The assessee submitted that it was unable to contest the tax demand on account of being unaware of proceedings. Further, the Circulars issued by the CBIC regarding procedure to be adopted in case of disparity between GSTR-3B and GSTR- 2A returns was not adhered to by the Revenue. *Held:* The entire tax demand pertained to disparity between the input tax credit claimed in the GSTR-3B return and that reflected in the auto populated GSTR-2A returns. The assessment order did not indicate that the transaction was not genuine. Further, the applicable Circulars were not adhered to in this regard. Therefore, the assessee was to be given an opportunity to contest the tax demand. Accordingly, the impugned assessment order was quashed subject to remittance of 10% of the disputed tax demand by the assessee. *Decision:* In favour of assessee IN THE MADRAS HIGH COURT SENTHILKUMAR RAMAMOORTHY Sri Lakshmi Silvers v. STO W.P. No. 6196 of 2024 And W.M.P. Nos. 6864 & 6866 of 2024 11 March, 2024 Petitioner by: V. Srikanth Respondent by: K. Vasanthamala, GA (T) ORDER An assessment order dated 11-7-2023 is assailed both on grounds of breach of principles of natural justice and on the ground that applicable circulars with regard to the procedure to be followed in cases of discrepancy between the GSTR-3B returns and the auto populated GSTR-2A returns were not adhered to. 2. The petitioner is a registered person under applicable GST enactments and engaged in the business of supply of base metals. In respect of assessment year 2019-20, the petitioner had received supplies and claimed ITC in respect thereof. Pursuant to a notice in Form GST ASMT-10, the petitioner also received an intimation and show cause notice. The petitioner was unable to respond to the intimation and show cause notice because the petitioner was not aware of the same since the petitioner was entirely dependent on his accountant and was not informed about the above. The impugned assessment order was issued in the above facts and circumstances. 3. Learned counsel for the petitioner submits that the petitioner did not have an opportunity to contest the tax demand. He also submits that circulars were issued by the Central Board of Indirect Taxes and Customs with regard to the procedure to be adopted in case there is disparity between the GSTR-3B returns and the GSTR- 2A returns. He contends that this procedure was not adhered to in the case at hand. On instructions, he submits that the petitioner is agreeable to remit 10% of the disputed tax demand as a condition for remand. 4. Mrs.K.Vasanthamala, learned Government Advocate, accepts notice on behalf of the respondent. From the impugned assessment order, it is evident that the entire tax demand pertains to the disparity between the ITC claimed in the GSTR-3B return and that reflected in the auto populated GSTR-2A returns. The impugned assessment order does not indicate that the transaction was not genuine. Learned counsel for the petitioner also contended that applicable circulars were not adhered to in this regard. In these circumstances, albeit by putting the petitioner on terms, I am of the view that the petitioner should be provided an opportunity to contest the tax demand. 5. Therefore, the impugned assessment order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to file a reply to the show cause notice within the aforesaid period. Subject to receipt of the reply and upon being satisfied that 10% of the disputed tax demand was received, the assessing officer is directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order in accordance with law within a maximum period of two months thereafter. 6. W.P.No.6196 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.6864 and 6866 of 2024 are closed.

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Central Goods and Services Tax Act, 2017, Section 73

Determination of tax--No opportunity given to contest tax demand--Validity of

Conclusion: Where assessee was not given reasonable opportunity to contest tax demand, the assessment order passed was to be quashed.

Revenue passed assessment order under section 73 of the Act due to disparity between GSTR-3B and GSTR- 2A returns. The assessee submitted that it was unable to contest the tax demand on account of being unaware of proceedings. Further, the Circulars issued by the CBIC regarding procedure to be adopted in case of disparity between GSTR-3B and GSTR- 2A returns was not adhered to by the Revenue. Held: The entire tax demand pertained to disparity between the input tax credit claimed in the GSTR-3B return and that reflected in the auto populated GSTR-2A returns. The assessment order did not indicate that the transaction was not genuine. Further, the applicable Circulars were not adhered to in this regard. Therefore, the assessee was to be given an opportunity to contest the tax demand. Accordingly, the impugned assessment order was quashed subject to remittance of 10% of the disputed tax demand by the assessee.

Decision: In favour of assessee

IN THE MADRAS HIGH COURT

SENTHILKUMAR RAMAMOORTHY

Sri Lakshmi Silvers v. STO

W.P. No. 6196 of 2024 And W.M.P. Nos. 6864 & 6866 of 2024

11 March, 2024

Petitioner by: V. Srikanth

Respondent by: K. Vasanthamala, GA (T)

ORDER

An assessment order dated 11-7-2023 is assailed both on grounds of breach of principles of natural justice and on the ground that applicable circulars with regard to the procedure to be followed in cases of discrepancy between the GSTR-3B returns and the auto populated GSTR-2A returns were not adhered to.

2. The petitioner is a registered person under applicable GST enactments and engaged in the business of supply of base metals. In respect of assessment year 2019-20, the petitioner had received supplies and claimed ITC in respect thereof. Pursuant to a notice in Form GST ASMT-10, the petitioner also received an intimation and show cause notice. The petitioner was unable to respond to the intimation and show cause notice because the petitioner was not aware of the same since the petitioner was entirely dependent on his accountant and was not informed about the above. The impugned assessment order was issued in the above facts and circumstances.

3. Learned counsel for the petitioner submits that the petitioner did not have an opportunity to contest the tax demand. He also submits that circulars were issued by the Central Board of Indirect Taxes and Customs with regard to the procedure to be adopted in case there is disparity between the GSTR-3B returns and the GSTR- 2A returns. He contends that this procedure was not adhered to in the case at hand. On instructions, he submits that the petitioner is agreeable to remit 10% of the disputed tax demand as a condition for remand.

4. Mrs.K.Vasanthamala, learned Government Advocate, accepts notice on behalf of the respondent. From the impugned assessment order, it is evident that the entire tax demand pertains to the disparity between the ITC claimed in the GSTR-3B return and that reflected in the auto populated GSTR-2A returns. The impugned assessment order does not indicate that the transaction was not genuine. Learned counsel for the petitioner also contended that applicable circulars were not adhered to in this regard. In these circumstances, albeit by putting the petitioner on terms, I am of the view that the petitioner should be provided an opportunity to contest the tax demand.

5. Therefore, the impugned assessment order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to file a reply to the show cause notice within the aforesaid period. Subject to receipt of the reply and upon being satisfied that 10% of the disputed tax demand was received, the assessing officer is directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order in accordance with law within a maximum period of two months thereafter.

6. W.P.No.6196 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.6864 and 6866 of 2024 are closed.