Tag: GSTR-3B Vs. 2A Notice

Excess ITC already reversed and Interest Paid – Order demanding Interest and Penalty Set aside and treated as SCN

Citation:

K.C. & Sons vs. Deputy Commissioner (ST), GST Appeal

High Court of Madras

[2025] 171 taxmann.com 31 (Madras)[20-12-2024]

Facts of the Case:

  1. There was a mismatch between GSTR3B and GSTR2A, for FY 2017-18.
  2. DRC-01A was issued on 2nd May 2023 and DRC-01 was issued on 10th May, communicating the date of Personal Hearing as 21st June 2023.
  3. Reply was filed on 9th May 2023 and Order confirmig the demand, was passed on 7th December.

Submissions of the Petitioner:

The difference being the excess ITC, was already reversed in 2019, whereas the Order propose to levy Interest and Penalty and also that a portion fo the interest demanded, has already been paid.

Held that:

  1. Given that the petitioner has already reversed the excess credit, one final ooportunity for personal hearing shall be granted.
  2. The impugned Order is Set Aside and shall be treated as Show Cause Notice.
  3. The petitioner shall file their objections within four weeks from the date of receipt of the order and the department shall consider the same and pass appropriate order, after providing an opportunity of Personal Hearing.

Assessee awaiting particulars from supplier, needs to be given time to explain difference in GSTR-3B Vs. 2B

In the case of:

Tvl. Lakshmi Tex Vs. Deputy State Tax Officer-1

W.P. No. 7005 of 2024

[2024] 160taxmann.com627 (Madras)

  1.  The petitioner is a dealer of woven fabrics in cotton and readymade garments. He states that he could not submit reply to the SCN (with regard to with regard to disparity between the GSTR-3B and GSTR-2B returns) issued pursuant to scrutiny of the returns, as he was awaiting particulars from his supplier.
  2.  The petitioner had enclosed the relevant purchase invoice to establish that there was no discrepancy and that consequently no tax liability is imposable. He also agrees to remit the pre-deposit of 10% of disputed tax.
  3. The petitioner submitted appeal on the ground that reasonable opportunity was not provided to contest the tax demand.

It was observed by the Hon’ble High Court of Madras that:

  1. On examining the show cause notice and impugned order, it is clear that the entire tax liability is with regard to disparity between the GSTR-3B and GSTR-2B returns. The petitioner has, subsequent to the issuance of such order, explained that ITC was validly availed of by submitting documents in support thereof.
  2. Undoubtedly, the petitioner was negligent in not doing so upon receipt of SCN.
  3. Nonetheless, if the explanation of the petitioner is valid, the interest of justice would be prejudiced unless the petitioner is provided an opportunity to explain the alleged disparity.
  4. For the reasons set out above, the impugned order is quashed subject to the condition that the petitioner remits the pre-deposit of 10% of disputed tax within 2 weeks.

GSTR-3B Vs. 1 Vs. 2A Notice – Order passed without considering the reply – Tables of SCN were contradictory — Order Set Aside

In the case of:

Ambika Stores Vs. Deputy State Tax Officer

W.P. No. 6320 of 2024

[2024] 160taxmann.com433 (Madras)

It was observed by Hon’ble High Court of Madras that:

  1. On examining the show cause notice, it is evident that two tables are set out therein. In the first table, the CGST and SGST amounts in GSTR-3B are shown as Rs. 3,33,787/-, whereas in the second table dealing with the difference between the GSTR-3B return and the auto populated GSTR-2A return, the GSTR-3B amounts are specified as Rs. 5,19,362/- both for CGST and SGST. The sum of Rs. 5,19,362/- tallies with the ITC availed of by the petitioner.
  2. Thus, the show cause notice is contradictory.
  3. In addition, it appears that the reply of the petitioner was not considered in the assessment order.
  4. The order simply states “It has been noticed that you have filed both GSTR 1 and GSTR-3B for the period from July – 2017 to March – 2018 thereby collecting the tax. During the scrutiny of the return for the above tax period difference between liability declared in GSTR-1 and tax paid under GSTR-3B as detailed below which shows that there was a mismatch between GSTR 1 and GSTR 3B returns.”
  5. The above order indicates clearly that the assessing officer did not take into account the reply dated 29.09.2023 and record reasons as to why such reply is not satisfactory.
  6. Therefore, the impugned assessment order is quashed and department can issue a fresh SCN.