Madras HC Orders Reconsideration of GST Demand Due to Mismatch in GSTR 3B and 2A Returns and Petitioner’s Inability to Respond

A Goods and Services Tax (GST) demand order has been set aside by the Madras High Court and asked the respondent to reconsider the case, allotting the applicant a personal hearing on the foundation that the order was held with no reason and losses to acknowledge the response of the applicant.

The plea aimed to quash the impugned order issued via the Assistant Commissioner, encountering that the order was arbitrary and illegal since the same did not regard the reply proposed via the applicant for the mismatch between GSTR 3B and GSTR 2A returns.

S. Ramanan, representing the applicant claimed that the impugned order was issued one day post the 3rd reminder without considering the response of the applicant. In response, the applicant elaborated that they had moved to a new GST number because of the issues in utilizing the original number.

The respondent, C. Harsha Raj, appeared and held that the applicant was not permitted to claim for input tax credit (ITC) reflected in a different GST number. He claimed that the principles of natural justice were followed, and the submissions of applicants were duly taken into account.

The single bench of Justice Senthilkumar Ramamoorthy remarked that although the reply of the applicant was extracted in the impugned order, the assessing officer recorded that the reply was not acceptable and confirmed the obligation without furnishing any cause.

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As per the court, since no reason supported the conclusion, the impugned order was not sustainable. The order was set aside by the court and remanded the case for reconsideration. The respondent was asked to furnish a reasonable chance to the applicant along with the personal hearing and issue a fresh order within 3 months from the date of receipt of a copy of the order of the court.