Muthu Traders Vs Deputy Commercial Tax Officer
Date: April 22, 2024
Subject Matter
GSTR 2A Vs 3B mismatch: Matter remanded for reconsideration with the taxpayer required to remit 10% of the disputed tax demand
Summary
The case involves a petitioner, Muthu Traders, challenging a tax demand related to GST discrepancies due to a mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A. The petitioner claimed ignorance of GST compliances and asserted that a consultant was engaged for such matters. However, the petitioner was unaware of the proceedings leading to the impugned order. The court observed that the tax liability arose from the discrepancy between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A, and the tax demand was confirmed because the petitioner failed to respond or appear for the personal hearing. The court set aside the impugned order, mandating a 10% pre-deposit by the petitioner for remand and providing an opportunity to contest the tax demand on merits. The matter was remanded for reconsideration, with the petitioner required to remit 10% of the disputed tax demand and submit a reply to the show cause notice within a specified period.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 10.07.2023 is challenged in this writ petition on the ground that the petitioner was not provided a reasonable opportunity to contest the tax demand on merits.
2. The petitioner states that he is engaged in the business of trading in groceries and allied products. The petitioner asserts that he is not conversant with GST compliances and had engaged a consultant for such Since the consultant did not inform the petitioner about proceedings culminating in the impugned order, it is stated that the petitioner was unaware of such proceedings.
3. Learned counsel for the petitioner submits that the confirmed tax demand pertains to mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A. If provided an opportunity, he submits that the petitioner would be able to explain the discrepancy. On instructions, he submits that the petitioner is willing to remit 10% of the disputed tax demand as a condition for remand.
4. Mr. T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for respondents 1 & 2. He points out that the impugned order was preceded by an intimation, show cause notice and a personal hearing notice.
5. On perusal of the impugned order, it is evident that the tax liability pertains to the mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A. It is also evident that the tax demand was confirmed because the petitioner failed to reply or appear for the personal hearing. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary to provide an opportunity to the petitioner to contest the tax demand on merits.
6. Solely for such reason, the impugned order dated 10.07.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice within the aforesaid period. Upon receipt of the petitioner’s reply and upon being satisfied that 10% of the disputed tax demand was received, the respondents 1 & 2 are directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of the petitioner’s reply. In view of the assessment order being set aside, the consequential bank attachment is raised.
7. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed