Unintentional Error in GSTR-3B Filing: Madras HC Directs Issuance of Fresh GST Order

The Madras High Court in a ruling set aside an order for GST obligation because of the non-payment under the Reverse Charge Mechanism (RCM). The matter, Tvl. Kwatra Karteek Vs Assistant Commissioner (ST)(FAC), is on the violation of natural justice principles and the applicant’s accidental error during filing Form GSTR 3B. The importance of due process and fair hearing in tax assessments is shown in this judgment.

Detailed Analysis in the Case of Kwatra Karteek

On December 28, 2023, the case derived from an original order, which Tvl. Kwatra Karteek contested, quoting a violation of natural justice. The applicant asserted unfamiliarity with the proceedings directing to the order because of a lapse by their part-time accountant. The same analysis resulted in the applicant not receiving critical information for the tax demand.

The problem was that an alleged short GST payment was attributed to an accidental error in filing Form GSTR 3B. The counsel of the applicant claimed that given a chance, they can establish no short payment has emerged. This justification shows the procedural lapse, stressing that the impugned order was issued without any notice and chance for the applicant to show their matter.

Mr. V. Prasanth Kiran, representing the respondent remarked that the order complied with a SCN on 30th September 2023. Even after this, the court discovered that the tax demand concentrated on the non-payment under RCM (Reverse Charge Mechanism) arrived from the filing error of the applicant. The same error can be improved if the applicant was permitted to challenge the demand on its merits.

The court on analyzing the matter regarded the need to furnish the applicant with a fair opportunity to address the tax demand. The court nextly set aside the original order, on a prerequisite that the applicant remit 10% of the disputed tax within 3 weeks of obtaining the order of the court. The applicant was allowed to answer the SCN within the same duration.

The respondent should provide a reasonable chance for a personal hearing, on receipt of the 10% payment and the response of the applicant. After that a fresh assessment order should be issued within three months, the court asked.

Closure: The decision of the Madras High Court in Tvl. Kwatra Karteek Vs Assistant Commissioner (ST)(FAC) emphasizes the role of the judiciary in ensuring compliance with principles of natural justice in tax matters.

The court by setting aside the original order and mandating a 10% pre-deposit, balanced the requirement for compliance with fair hearing procedures. The same ruling serves as a reminder of the crucial significance of due process in the administration of tax statutes, ensuring assesses are provided a fair chance to contest and clarify tax demands.

Case TitleKwatra Karteek Vs Assistant Commissioner(ST)(FAC)
CitationW. P.N o.12559 of 2024
W.M.P.Nos.13709 & 13711 of 2024
Date06.06.2024
For PetitionerMr.D.Vijayakumar
For RespondentMr.V.Prasanth Kiran, GA (T)
Madras High CourtRead Order
Arpit Kulshrestha

Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous.

Recent Posts

No GST Returns Will Be Accepted If Filed More Than 3 Years Past Their Due Date

An advisory has been released by the Goods and Services Tax Network (GSTN) which notifies…

14 hours ago

Delhi HC: Two Judgment Orders Against One SCN Cannot Be Accepted for the Same Period

It was cited by the Delhi HC that the two adjudication orders against one SCN…

16 hours ago

CBDT Allows Electronic Filing of Forms 3CEDA and 3C-O Via Notification No. 5/2024

The Central Board of Direct Taxes (CBDT) in an update for the taxpayers via the…

17 hours ago

October 2024 Records the 2nd Highest GST Collection, Driven by Domestic Sales

In October, Gross GST collection surged to 9% to Rs 1.87 lakh crore, the second…

19 hours ago

UP AAR: GST Will Be Levied on the Installation of Electricity Distribution Systems by DISCOMs

Goods and Services Tax (GST) is to get paid on the procurement of materials and…

2 days ago

Bombay HC Quashes Rejection Order for Voluntary GST Cancellation Due to Lack of Stated Reasons

The Bombay High Court carried that as the revocation orders for the registration cancellation on…

3 days ago