Madras High Court Quashes GST Assessment Order, where 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.

Facts of the Case 📅

The Petitioner, engaged in the supply of base metals, faced an assessment order, challenging it for breaching principles of natural justice and for not adhering to specific circulars regarding discrepancies between GSTR-3B returns and GSTR-2A returns for the year 2019-20.

Despite receiving a notice and show cause notice, the Petitioner was unaware due to reliance on an accountant, leading to no response from their side.

The 🤔 issue revolved around the assessment order's validity, especially concerning the principles of natural justice and adherence to specific circulars regarding GST return discrepancies.

Petitioner's Argument 🗣

The Petitioner argued the lack of opportunity to contest the tax demand, citing non-adherence to circulars issued by the Central Board of Indirect Taxes and Customs on handling disparities between GSTR-3B and GSTR-2A returns. ARR

They offered to remit 10% of the disputed tax demand as a condition for the case's remand.

Department's Argument 🏛

The tax demand was based on the disparity between the ITC claimed in GSTR-3B and GSTR-2A returns, with no indication of the transactions being non-genuine.

Court quashed the impugned assessment order, subject to the Petitioner remitting 10% of the disputed tax demand. ARR