GST order set aside for failing to consider petitioner's submissions during July 2017 return rectification proceedings

The Telangana HC allowed a petition challenging a GST order regarding rectification of errors in filing returns for July 2017, during GST law's initial implementation phase. The court found the impugned order failed to address petitioner's contentions and submissions made in reply to the show cause notice. The HC set aside the order and remanded the matter to the authority for fresh consideration of petitioner's submissions with a direction to grant personal hearing on 27.02.2024 without requiring fresh notice.

---

---

Issues involved:
The challenge in the present Writ Petition is to the order passed by respondent No. 1 affirming the demand under Section 73(1) of Central Goods and Services Tax Act, 2017 and imposing a penalty under Section 73 of the Act. The dispute arose due to errors in GST returns for the period July 2017, at the initial stage of GST implementation.

Details of the Judgment:

Error in GST Returns:
The petitioner made errors in reflecting the CGST and SGST tax components in its GST returns for July 2017. Despite promptly notifying the authorities about the errors and seeking permission to rectify them, subsequent mistakes were made in the ITC reversal under IGST instead of SGST during the audit of Form GSTR-3B in September 2018.

Show Cause Notice and Impugned Order:
Following a show cause notice alleging excess ITC availment, the petitioner submitted a detailed reply highlighting the inadvertent errors made. However, the respondent-authorities mechanically passed the impugned order without addressing the contentions raised in the petitioner's reply, confirming the demand and imposing a penalty.

Judicial Precedents and Relief Sought:
The petitioner's counsel referred to decisions from various High Courts where similar issues were addressed favorably to the assessees. The High Courts emphasized the need for the department to recognize and permit corrections for inadvertent errors in GST returns, ensuring a more assessee-friendly approach. Based on these precedents, the High Court allowed the petition, setting aside the impugned order and remitting the matter back to respondent No. 1 for reconsideration, directing a fresh personal hearing for the petitioner.

Conclusion and Directions:
The High Court allowed the Writ Petition, permitting the petitioner to make fresh submissions and directing respondent No. 1 to reconsider the matter in light of the contentions raised and judicial precedents. The petitioner was instructed to attend a hearing on a specified date, without the need for a fresh notice. The judgment concluded with no order as to costs, and any pending miscellaneous applications were to be closed.

---