Tax Demand of Rs. 18.06 Crores Challenged Due to GSTR-1 and GSTR-3B Return Discrepancies

The HC disposed of a writ petition challenging tax demand of Rs. 18.06 crores with interest and penalty arising from discrepancies between GSTR-1 and GSTR-3B returns. Petitioner claimed the error was rectified in subsequent returns with tax and interest paid per revenue circular. The court directed the tax officer to treat petitioner's contentions as a representation, grant a hearing, and decide within six weeks. No coercive action to be taken during pendency, with two weeks' grace period if decision is adverse. The court also noted concerns about document readability for visually impaired persons.

---

---

Issues:
1. Petitioner seeks quashing of orders related to tax demand, penalty, and notices under DGST Act.
2. Discrepancy in tax returns filed for March and April 2019.
3. Petitioner's contention of depositing tax and interest as per revenue circular.
4. Respondents to examine contentions and documents, grant hearing, and issue directions.
5. Directions issued by the court for the disposal of the representation and subsequent actions.
6. Concerns raised regarding the readability of orders for visually impaired individuals.

Analysis:

The petitioner filed a writ petition seeking to quash the impugned order dated 24.07.2021, which raised a tax demand of Rs. 18.06 crores, along with interest and penalty, due to a discrepancy between GSTR-1 and GSTR-3B returns for March 2019. The petitioner argued that the error was rectified in the subsequent return for April 2019, and the tax with interest was deposited in accordance with the revenue's circular. The court noted the petitioner's compliance with the circular and directed the concerned officer to examine the contentions and documents provided by the petitioner.

The respondents agreed to review the petitioner's submissions and assured that if satisfied, necessary directions would be issued. The court disposed of the writ petition with directions for the concerned officer to treat the petitioner's contentions as a representation, grant a hearing to the petitioner's authorized representative, and refrain from taking any precipitate action pending the representation's disposal. The decision on the representation was to be communicated to the petitioner, with a two-week grace period in case of an adverse decision. The court emphasized expeditious disposal within six weeks and closed the pending application accordingly.

Furthermore, the court raised concerns about the readability of orders, noting that endorsements across pages could hinder readability, especially for visually impaired individuals. It suggested affixing endorsements where there is no writing to ensure accessibility and requested the concerned party to address this issue with the CEO of Goods and Service Tax Network.

---