GSTR 3B and GSTR 2A mismatch needs fair hearing before tax demand is confirmed

An assessment based on mismatch between GSTR 3B and auto-populated GSTR 2A was conditionally set aside because the assessee's reply, reconciliation material, and supporting purchase documents were not properly considered. The court treated the belated supplier certificate as relevant to explaining the discrepancy and found that the decision-making process required a further opportunity before the tax demand could be effectively adjudicated. The matter was remitted for fresh consideration with a personal hearing, subject to payment towards the disputed demand.

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Issues: Whether the assessment order, passed on the basis of mismatch between GSTR 3B and auto-populated GSTR 2A, was liable to be set aside for want of proper consideration of the reply and supporting documents, and for denial of a reasonable opportunity of hearing.

Analysis: The reply filed by the assessee included reconciliation material and documents said to support the genuineness of the purchases. The supplier's certificate, though obtained belatedly, was relevant to explain the disparity. In the circumstances, the decision-making process was found to require a further opportunity to the assessee so that the tax demand could be effectively adjudicated, and the matter was directed to be reconsidered after putting the assessee on terms.

Conclusion: The assessment order was set aside conditionally, and the matter was remitted for fresh consideration after granting a reasonable opportunity, including a personal hearing, upon payment of Rs. 1,00,000/- towards the disputed demand.

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