Vijaykumar Vs State Tax Officer
Date: March 13, 2024
Subject Matter
Where taxpayer avails lower amount as ITC than the amount reflected in the GSTR 2A, the conclusion that the taxpayer wrongly availed of ITC indicates non application of mind
Summary
The petitioner, engaged in the business of supply of bricks, blocks, tiles, and ceramic goods, challenged an assessment order and bank attachment notice, claiming unawareness due to being uneducated and computer illiterate. The petitioner disputed the assessment order citing errors in the conclusion on input tax credit and interest liability. After hearing both parties, the court quashed the assessment order and remanded the matter back to the assessing officer for reconsideration, directing the petitioner to file a reply to the show cause notice and allowing for a personal hearing. The attachment notice was raised, and the amount appropriated from the petitioner's bank account was subjected to the outcome of the remanded proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner assails both an assessment order dated 24.07.2023 and a consequential bank attachment notice dated 26.02.2024.
2. The petitioner is engaged in the business of supply of bricks, blocks, tiles and ceramic goods. The petitioner asserts that he is uneducated and computer illiterate. Therefore, it is further asserted that the petitioner was unaware of proceedings commencing from the issuance of an intimation dated 19.01.2023 and culminating in the impugned assessment order dated 24.07.2023.
3. Learned counsel for the petitioner invited my attention to the impugned assessment order. With reference to defect 1, she pointed out that the assessing officer concluded that no further action is required. As regards defect 2, she pointed out that the petitioner had claimed Input Tax Credit (ITC) of Rs.54,000/- each for SGST and CGST in the GSTR 3B return, whereas the auto-populated GSTR 2A return reflected the availability of ITC to the extent of Rs. 3,23,967/- each towards SGST and CGST. In those circumstances, she submits that the conclusion that the petitioner wrongly availed of eligible ITC is patently wrong and indicates complete non application of mind. As regards the liability to pay interest, she points out that the sum of Rs.3,97,353/- each towards SGST and CGST was remitted on 06.03.2024. In conclusion, learned counsel points out that a sum of Rs.10,86,310/- was appropriated towards the demand under the impugned assessment order from the petitioner’s bank account in the Canara Bank.
4. Mr. V. Prashanth Kiran, learned Government Advocate, accepts notice for the 1st respondent. He points out that both the intimation and show cause notice were served on the petitioner by post and not merely uploaded on the GST portal. Therefore, he submits that principles of natural justice were clearly complied with.
5. On perusal of the impugned assessment order, it is evident that the petitioner availed of a lower amount as ITC than the amount reflected in the auto-populated GSTR 2A return. In those circumstances, the conclusion that the petitioner wrongly availed of ITC indicates non application of mind. As regards the interest liability for belated filing of returns, the evidence on record reflects that the petitioner remitted sums of Rs.3,97,353/- each towards CGST and SGST on 06.03.2024. In these circumstances, the impugned order calls for interference.
6. Therefore, the impugned assessment order is quashed and the matter is remanded to the assessing officer for reconsideration. The petitioner is permitted to file a reply to the show cause notice dated 24.07.2023 within a period of two weeks from the date of receipt of a copy of this order. Upon receipt thereof, the assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a period of two months from the date of receipt of the petitioner’s reply. Since the sum of Rs.10,86,310/- was appropriated from the petitioner’s Canara Bank account, the attachment notice issued to recover the tax demand shall stand raised and the amount appropriated shall abide by the outcome of the remanded proceedings.
7. These writ petitions are disposed of on the above terms. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed.