2023 (10) TMI 927 - HC - GST

Taxpayer Wins Challenge Against GST Proceedings, Highlights Procedural Flaws and Secures Case Review Under Section 74

Petitioner challenged proceedings u/s 74 of GST Act for 2017-18, alleging procedural irregularities in GSTIN declarations. HC found merit in arguments and ... Remand for fresh adjudication - application of administrative circular regarding input tax credit reconciliation - disallowance of input tax credit on account of wrong GSTIN mentioned by supplier in GSTR-1 - quashing of order and direction to decide afreshApplication of administrative circular regarding input tax credit reconciliation - disallowance of input tax credit on account of wrong GSTIN mentioned by supplier in GSTR-1 - remand for fresh adjudication - Impugned order dated 26.7.2023 under Section 74 set aside and matter remitted for fresh decision to consider the circular dated 2.1.2023 and any other material relied upon by the petitioner. - HELD THAT: - The Court accepted the respondents' concession that the authority was required to consider the administrative circular dated 2.1.2023 concerning reconciliation of input tax credit claimed in GSTR-3B and supplies reported in GSTR-1 where the supplier has mentioned an incorrect GSTIN of the recipient. The impugned order, although referring to the circular, did not extend the benefit or follow the procedure indicated in paragraph 4 of the circular. In view of the parties' positions the Court set aside the impugned order and directed respondent no.2 to pass fresh orders within one month, taking into consideration the circular and any other material placed by the petitioner, thereby remitting the dispute for fresh adjudication rather than deciding the merits.Impugned order dated 26.7.2023 quashed; matter remitted to respondent no.2 to decide afresh within one month in accordance with the circular dated 2.1.2023 and other materials.Final Conclusion: Writ petition disposed of by setting aside the impugned order and remitting the matter to respondent no.2 for fresh decision within one month after considering the administrative circular dated 2.1.2023 and any material relied upon by the petitioner. Issues involved:Challenge to proceedings u/s 74 of U.P. GST/CGST Act for financial year 2017-18.Summary:The writ petition challenged proceedings initiated u/s 74 of U.P. GST/CGST Act for the financial year 2017-18. The petitioner sought quashing of the impugned order dated 26.7.2023 passed u/s 74 of the Act. The petitioner's counsel referred to a circular dated 2.1.2023 regarding input tax availed in GSTR-3B and highlighted discrepancies in GSTIN declarations. The petitioner argued that the authority did not follow the procedure outlined in the circular and requested the matter to be remitted for fresh decision. Respondent's counsel agreed to remit the matter for fresh orders. Consequently, the impugned order was set aside, and the case was remitted back to respondent no. 2 for fresh orders within one month, considering the circular and other supporting materials presented by the petitioner.This judgment addressed the challenge to proceedings initiated u/s 74 of the U.P. GST/CGST Act for the financial year 2017-18. The petitioner's counsel raised concerns regarding discrepancies in GSTIN declarations and the failure of the authority to follow the prescribed procedure outlined in a relevant circular. The respondent's counsel agreed to remit the matter for fresh orders, leading to the setting aside of the impugned order and remittance of the case back to the authority for a fresh decision within a specified timeframe.