Mismatch in GSTR 3B & 1 Returns Because of 36% Tax Calculation on Specific Items: Madras HC Directs Reconsideration

The Madras High Court in a recent ruling remanded the case of GSTR 3B & GSTR 1 Mismatch emerged because of the GST (Goods and Services Tax) calculation at 36% for specific items for reconsideration as the department has recovered the amount of Rs.68,677 from the applicant through the way of debit from the applicant’s electronic credit ledger.

The applicant, Jinvar Trading, asserted ignorance of the proceedings directing to the impugned order. It was argued that the applicant’s part-time accountant failed to validate the “View Additional Notices and Orders” tab on the GST portal, where the pertinent notices and orders were uploaded.

The applicant’s counsel shows that the GST proposal in question is pertinent to the disparity between the applicant’s GSTR-3B return and the GSTR-1 statement. A substantial amount had been recovered earlier from the applicant’s electronic credit ledger, representing a significant part of the disputed tax obligation. The applicant asked for a chance to argue the tax demand on its merits.

Representing the respondent, Mrs K. Vasanthamala, said that enough chance has been furnished to the applicant via the issuance of a notice in Form ASMT 10 and a show cause notice.

The bench of Justice Senthilkumar Ramamoorthy acknowledging the GST order along with the submissions, regarded the disparity between the GSTR 3B return and the GSTR 1 statement. It was proved that the proposal of tax had been confirmed because of the failure of the applicant to answer the SCN or participate in the personal hearing. Provided such situations, the court regarded the same as essential to furnish the applicant with a chance, particularly acknowledging the substantial recovery made before.

On 30th October 2023, the impugned order was set aside, and the case was remanded for reconsideration via the respondent. The applicant was allotted two weeks to provide a response to the SCN (Show Cause Notice) on 21st September 2023.

On the applicant’s reply receipt, the respondent was asked to furnish a reasonable chance along with the personal hearing and then issue a fresh order within 3 months. It was stated that the amount debited via the electronic credit ledger of the applicant for the tax obligation under the impugned order shall be within the resultant of the remanded proceedings.

Read Also: No Tax Recovery As Per Differences B/W GSTR 1 & 3B Without Following CGST Rule 88C

The writ petition was disposed of without any order as to costs, and related miscellaneous petitions were closed. For the petitioner, Ms.C.Rekhakumari appeared.