GST mismatch between GSTR-1 and GSTR-3B: assessment set aside and remanded after fresh opportunity to explain reconciliation records.

A GST assessment based on mismatch between GSTR-1 and GSTR-3B was set aside and remanded because the assessee had not been given a fair opportunity to contest the demand on merits. Reconciliation material in GSTR-9C and related return records was produced to show that the unreconciled amount had already been paid, but the record was insufficient for a final determination in writ proceedings. The HC ordered a fresh consideration by the assessing authority after receipt of a reply and supporting documents, subject to deposit of 10% of the disputed tax demand and grant of a personal hearing.

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Issues: Whether the assessment order was liable to be set aside and the matter remanded on the ground that the petitioner was not afforded a reasonable opportunity to contest the tax demand on merits, particularly in relation to the discrepancy between GSTR 1 and GSTR 3B returns.

Analysis: The impugned order arose out of a notice under GST ASMT 10, a show cause notice and reminder, and the confirmed demand related to the difference between the petitioner's GSTR 1 statement and GSTR 3B returns. The petitioner produced reconciliation material in GSTR 9C and related return records indicating that the unreconciled amount had been paid in April 2018. The material did not permit a definitive finding on merits in writ proceedings, but the circumstances justified one more opportunity to place the matter before the assessing authority. The remand was ordered on terms, including deposit of 10% of the disputed tax demand, followed by a fresh consideration after a reply and personal hearing.

Conclusion: The assessment order was set aside and the matter was remanded for reconsideration subject to deposit of 10% of the disputed tax demand and submission of a reply with supporting documents, after which a fresh assessment order was to be passed.

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