GST UPDATE

Desk of CA. Praveen Sharma Series- 512

MADRAS HIGH COURT in the Case of Perfect Assayers Private Limited

Court Decision on Section 73 of the CGST Act, 2017

Summary

The petitioner challenged an order issued under Section 73 of the CGST Act, 2017, arguing that their response to the show cause notice was not considered. The court observed that the operative part of the order lacked reasons, and there was no explanation provided for rejecting the petitioner's reply. Furthermore, the order did not discuss or record reasons for rejecting the explanations regarding discrepancies between the petitioner’s GSTR-3B returns and the auto-populated GSTR-2A, despite the petitioner enclosing relevant invoices to explain these discrepancies.

Court’s Observations

Lack of Reasons in the Order: The court noted that the order did not specify reasons for rejecting the petitioner’s reply and explanation.

Discrepancies in Returns: The court highlighted that the order did not address the explanations provided by the petitioner for discrepancies between GSTR-3B and GSTR-2A.

Court’s Decision

The Hon’ble High Court quashed the impugned order and remanded the matter to the assessing officer for reconsideration. The respondent (assessing officer) was directed to:

Provide a reasonable opportunity to the petitioner, including a personal hearing.

Issue a fresh order within three months, taking into consideration the petitioner’s explanations and recording reasons for any decisions made.

Conclusion

The petitioner, who was subject to an order under Section 73 of the CGST Act, 2017, contended that their reply to the show cause notice was not duly considered. The court found that the order's operative part lacked specific reasons for rejecting the petitioner’s explanation. Additionally, the order did not address the discrepancies between the petitioner’s GSTR-3B returns and the auto-populated GSTR-2A, even though the petitioner had submitted relevant invoices to clarify these discrepancies.

The Hon’ble High Court quashed the impugned order and remanded the case to the assessing officer for reconsideration. The court directed the respondent to provide the petitioner with a reasonable opportunity, including a personal hearing, and to issue a new order within three months. This new order must consider all explanations and clearly record the reasons for any decisions made.

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CA. Praveen Sharma

NIRC Candidate 2024

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