Top Stories CBIC Circular’s Procedure dealing GSTR 3B & 2A Disparity not applied: Madras HC allows to Contest Demand on 10% Pre-deposit [Read Order] It was alleged they were denied the chance to challenge the tax demand and alleged non-compliance with CBIC circulars on discrepancies between GSTR-3B and GSTR-2A returns.

By Navasree A.M – On April 13, 2024 7:52 pm – 2 mins read The Madras High Court, quashing the order, allowed the taxpayer to contest the demand on 10% Pre-deposit condition. The court considered the allegation of petitioner claiming the procedure in the Central Board of Indirect Taxes and Customs ( CBIC ) dealing with the discrepancies in GSTR-3B and 2A were not applied in the matter. The petitioner, a registered entity engaged in the supply of base metals, faced an assessment for the 2018-19 tax year. Upon receiving a notice in Form GST ASMT-10, along with an intimation and show cause notice, the petitioner, reliant on their accountant, failed to respond due to lack of awareness. Consequently, the impugned assessment order was issued.

The Counsel for the petitioner submitted that they were denied the opportunity to contest the tax demand and that procedural guidelines outlined in circulars by the Central Board of Indirect Taxes and Customs ( CBIC ) were not followed regarding discrepancies between GSTR-3B and GSTR-2A returns. In a bid to resolve the issue, the petitioner is willing to remit 10% of the disputed tax demand. Responding to the allegations, the Government Advocate acknowledged that the entire tax demand arose from disparities between ITC claims in GSTR-3B and auto-populated GSTR-2A returns. However, there is no indication of transaction illegitimacy in the assessment order. The petitioner’s contention regarding non-adherence to circulars is also noted. Given these circumstances, the court, while putting the petitioner on notice, deemed it appropriate to grant an opportunity to contest the tax demand.

The impugned assessment order is thus quashed on the condition that the petitioner remits 10% of the disputed tax demand within two weeks of receiving a copy of the order. Additionally, the petitioner is permitted to file a reply to the show cause notice within the same period. Upon receipt of the reply and satisfaction of the remittance, the assessing officer is directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months.