GST UPDATE

???? Desk of CA. Praveen Sharma Series-557 ????

MADRAS HIGH COURT IN THE CASE OF International Construction Co Section 73 of the CGST Act, 2017

?The petitioner challenges an order dated 16.04.2024, claiming they were not given a fair chance to contest a tax demand due to minimal business activity in Tamil Nadu during 2018-2019 and failure to monitor the GST portal. The tax demand arose from discrepancies between GSTR 3B, GSTR 1, and GSTR 2A returns, and a significant mismatch between the Tamil Nadu turnover and the All India turnover reported in the profit and loss account.

?The court noted that while the Show Cause Notice addressed all claims, only two discrepancies were quantified. The impugned order included additional discrepancies based on a comparison of All India financials with Tamil Nadu returns. The petitioner provided an auditor's certificate confirming the Tamil Nadu turnover, suggesting the tax on the entire differential turnover might not be justified. However, the petitioner failed to respond to prior communications from the tax authorities.

?The court set aside the impugned order on the condition that the petitioner pays 10% of the disputed tax demand within three weeks and submits a reply to the Show Cause Notice. The tax authorities are directed to provide the petitioner a fair hearing and issue a fresh order within three months. The writ petition was disposed of accordingly.

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CA. Praveen Sharma

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