2024 (5) TMI 179 - HC - GST

Tax Authorities Cannot Reopen Settled GSTR Reconciliation Issues from 2018-19 Without New Substantial Evidence

HC ruled that a tax show cause notice cannot reopen a previously resolved issue of tax liability reconciliation between GSTR-1 and GSTR-3B returns for ... Reopening of completed assessment - Difference in output tax liability between GSTR-1 and GSTR-3B returns - the tax proposal in respect of the said discrepancy was confirmed by an earlier order and that the petitioner intends to challenge such order by separate proceedings - under declaration of ineligible ITC and invalid ITC under Section 16(4) - HELD THAT:- On examining earlier order and the impugned show cause notice, it is clear that they pertain to assessment period 2018-19. The first issue in the impugned show cause notice is the same issue determined under order dated 23.12.2023. Undoubtedly, it is not open to the respondent to reopen the same issue after issuing the earlier order. Petition is disposed of by directing the petitioner to respond to the show cause notice only insofar as it pertains to the issues of under declaration of ineligible ITC and invalid ITC under Section 16(4) - As regards the issue relating to reconciliation of GSTR-1 and GSTR-3B, the impugned show cause notice is set aside to that extent. Petition disposed off. Issues involved: Challenge to show cause notice dated 28.12.2023 on the ground of previously decided tax liability difference between GSTR-1 and GSTR-3B returns.Summary:The petitioner challenged a show cause notice dated 28.12.2023, citing that one of the issues raised, regarding the difference in output tax liability between GSTR-1 and GSTR-3B returns, had already been addressed in an order dated 23.12.2023. The petitioner contended that since the tax proposal related to this discrepancy was confirmed in the earlier order, it cannot be reopened in the impugned show cause notice.Upon examination, it was found that both the earlier order dated 23.12.2023 and the impugned show cause notice pertained to the assessment period 2018-19. The court noted that the first issue in the show cause notice was the same as the one determined in the order dated 23.12.2023. Consequently, the respondent was not allowed to reopen the same issue after issuing the earlier order.The court disposed of the case by directing the petitioner to respond to the show cause notice only concerning the issues of under declaration of ineligible ITC and invalid ITC under Section 16(4). However, the issue regarding the reconciliation of GSTR-1 and GSTR-3B was set aside from the show cause notice. The petitioner was granted the liberty to raise all contentions while responding to the notice, and connected miscellaneous petitions were closed without any costs.