Madras HC: Petitioner Receives Opportunity Due to GSTR-1 Turnover Reporting Error

Madras High Court in a recent judgment in the case of Parthasarathy Narasimhan vs. Deputy Commercial/State Tax Officer stresses an influential issue arising from an error in GSTR-1 turnover reporting. The applicant challenged an assessment order that charged a substantial tax obligation, claiming that the reported turnover was erroneously high as of inadvertent error.

The applicant, a registered entity under GST enactments, found that their turnover was incorrectly reported in the GSTR-1 return as Rs. 9,22,89,895/- rather than Rs. 92,28,895/-. The same reporting error directed to a hefty tax obligation of Rs. 1,48,20,834. Even after the applicant’s representation describing the error and providing evidence reinforcing the correct turnover, without giving a chance for contestation, the authorities moved with the assessment order.

The Madras High Court answered noting the petition of the applicant and the substantial discrepancy between the reported and actual turnover figures. The court discovered merit in the argument of the applicant that the whole tax obligation emerged as inaccurate reporting in the GSTR-1 return. The court then quashed the assessment order and remanded the case for reconsideration, outlining the importance of furnishing the applicant a fair chance to contest the tax demand.

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Madras High Court judgment in Parthasarathy Narasimhan vs. Deputy Commercial/State Tax Officer acts as a reminder of the effects of errors in GST reporting. The same case beyond easing the mistakes shows the requirement for the authorities to afford the assessees the opportunity to show their matter and ease the difference before levying substantial tax obligations.