Tag: Inadvertent Error

Where the right of Personal Hearing is not waived, Ex Parte order cannot be passed

Citation:

Kuehne Nagel (P.) Ltd. Vs. State of Maharashtra – Writ Petition No. 15210 of 2023

[2023] 157 taxmann.com 366 (Bombay)

Hon’ble High Court of Bombay

Relevant Facts:

  1. The assessee has in their reply to SCN specifically requested for Personal Hearing, but while submitting the reply in the GST Portal, they have checked the box “No” with regard to selection of Option for Personal Hearing.
  2. Hence, the department has not granted Personal Hearing.

Provisions governing grant of Opportunity of Personal Hearing:

Section 75(4):

An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.

Section 75(5):

The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:

Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.

Findings:

  1. This is an Inadvertent error on the part of the petitioner in ticking the Box “No”, because in the written reply to the Show Cause Notice, they have expressly requested for Personal Hearing.
  2. The department was under an obligation to grant Personal Hearing.
  3. The adjudicating officer (AO) was required to take into consideration the specific request. A Mechanical approach was adopted by AO in only noticing the box where the petitioner has inadvertently put a tick mark on “No”.
  4. This was not a case where the petitioner has expressly waived its right of Personal Hearing.
  5. Section 75(4) is applicable and the impugned order is in breach of Principles of Natural Justice and is contrary to Section 75(4).

Order:

  1. The Impugned Order is Quashed and Set Aside.
  2. The Petitioner shall be granted an Opportunity of Personal Hearing and after considering the contentions of the petitioner, appropriate Order shall be passed within 4 Weeks.

Amendment in form GSTR-1 for FY 2021-22 to be allowed for inadvertent error in mentioning wrong GSTIN

Citation:

Star Engineers (I) (P.) Ltd. Vs. Union of India – Writ Petition No. 15368 of 2023

[2023] 157 taxmann.com 285 (Bombay)

Hon’ble High Court of Bombay

Brief Facts:

  1. Assessee has shipped goods on Bill-to-Ship-to Basis and by mistake, they have mentioned the GSTIN of the party to whom goods are delivered, in the GSTR-1 Returns.
  2. When their Customer refused to make payment since the GST was not reflected in their GSTR-2B returns (Reflected in the Other Party’s GSTR-2B), the assessee requested the department (State Tax Officer) to allow them to amend GSTR-1 returns.
  3. On department’s refusal (Considering that due date for amendment of GSTR-1 returns for FY 2012-22 is 30th November 2022), this Writ Petition was filed.

Relevant Provisions – Due Date for amendment of GSTR-1 Returns:

Proviso to Section 37(3):

Any registered person, who has furnished the details under sub-section (1) for any tax period, shall, upon discovery of any error or omission therein, rectify such error or omission in such manner as may be prescribed, and shall pay the tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such tax period:

Provided that no rectification of error or omission in respect of the details furnished under sub-section (1) shall be allowed after the thirtieth day of November (Due date for furnishing the return for the month of September, up to 1st October 2022) following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier:

Proviso to Section 39(9):

Where any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in such form and manner as may be prescribed, subject to payment of interest under this Act:

Provided that no such rectification of any omission or incorrect particulars shall be allowed after the thirtieth day of November (Due date for furnishing thereturn for the month of September, up to 1st October 2022) following the end of the financial year to which such details pertain, or the actual date of furnishing of relevant annual return, whichever is earlier.

Findings:

  1. The Situation is Revenue Neutral – No Loss of Revenue (Amendment of GSTIN does not result in increase or decrease of GST Liability).
  2. This was mere Procedural error which was Bonafide and inadvertent on the part of the assessee and there was nothing illegal in it.
  3. GST regime as contemplated under the GST Law unlike the prior regime, has evolved a scheme which is largely based on the electronic domain.
  4. The traders and the assessees would be having limited expertise and resources. There are likely to be inadvertent and bonafide human errors, in the assessees adopting themselves to the new regime. For a system to be understood and operate perfectly, it certainly takes some time.
  5. The provisions of law are required to be alive to such considerations and it is for such purpose the substantive provisions of sub-section (3) of Section 37 and sub-section (9) of Section 39 minus the proviso, have permitted rectification of inadvertent errors.

Cases Relied Upon:

  1. Sun Dye Chem Vs. Assistant Commissioner – Madras High Court
  2. Pentacle Plant Machineries Pvt. Ltd. Vs. Office of GST Council & Ors – Madras High Court
  3. Shiva Jyoti Construction Vs. The Chairperson, Central Board of Excise & Customs and Ors – Orissa High Court
  4. Mahalaxmi Infra Contract Ltd. Vs. Goods and Services Tax Council and ors. – Jharkhand High Court

Order:

The department was directed to permit the assessee to amend the GSTR-1 returns for July 2021, November 2021 and January 2022 either through Online or Manual means, within 4 weeks.