TaxTMI 
TaxTMI 
2024 (1) TMI 1434
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....hat the petitioner, who carries on the business of operating a hotel, is registered under the Goods and Service Tax Act, having GSTIN No.08AACCG4611J1ZQ. He submitted his monthly returns in the prescribed form No. GSTR 3B for the financial year 2017-18. The respondent No.2, however, undertook scrutiny of the returns and thereafter, issued a notice on 01.09.2023 in prescribed form No. GST ASMT-10 intimating certain discrepancies, drawing proceedings under Section 61 of the RGST/CGST Act, 2017 for the financial year 2017-18. The aforesaid notice dated 01.09.2023 stated that the petitioner had availed input tax credit which was not available to him as per Section 17(5) of the RGST Act, 2017. In the notice, it was further detailed out that the ITC on payment made to M/s Kone Elevators India Pvt. Ltd. for purchase of lift and payment made for purchase of Air Conditioners were under block credit as per Section 17(5) of the RGST Act, 2017 and therefore, the same were not available to be availed. On such consideration, it was stated that the petitioner was liable to reverse the tax amounting to Rs.18,44,884/- (SGST amounting to Rs.9,22,442/- and CGST amounting to Rs.9,22,442/-), along with....
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....oked. He would submit that assumption of jurisdiction under Section 73 when the proceedings already been initiated under Section 61, without consideration of the explanation, are without jurisdiction. 10. The second limb of submission of learned counsel for the petitioner is that in any case, once the explanation offered to the discrepancies pointed out in notice under Section 61, ASMT-10 is found to be acceptable, the proceedings under Section 73 could not be drawn on the basis of discrepancy found in the return. Therefore, the proceedings drawn under Section 73 are liable to be quashed. He would also submit that once the explanation offered pursuant to notice under Section 61 is accepted, it is not permissible under the law to still retain jurisdiction to draw proceedings under Section 73 on the basis of discrepancy found in the return. 11. Per contra, learned counsel for the respondents would submit that firstly; the notice under Section 61 which was issued to the petitioner was responded by half-hearted reply. However, in any case, explanation offered by the petitioner was duly considered by the competent authority and only when the explanation was not found acceptable, the a....
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....escribed and seek his explanation thereto. (2) In case the explanation is found acceptable, the registered person shall be informed accordingly and no further action shall be taken in this regard. (3) In case no satisfactory explanation is furnished within a period of thirty days of being informed by the proper officer or such further period as may be permitted by him or where the registered person, after accepting the discrepancies, fails to take the corrective measure in his return for the month in which the discrepancy is accepted, the proper officer may initiate appropriate action including those under section 65 or section 66 or section 67, or proceed to determine the tax and other dues under section 73 or section 74." 16. Sub-Section (1) of Section 61 authorises the proper officer to scrutinise the return and related particulars furnished by the registered persons to verify the correctness of the return and inform him of the discrepancies noticed, if any, in prescribed manner and seek his explanation thereto. Sub-Section (2) and Sub-Section (3) deal with different contingencies. While sub-section (2) provides for the course of action that may be adopted in a case where e....
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....rmality. The aforesaid provision is required to be interpreted in the manner that the explanation offered by the registered person is to be examined by the proper officer. Once an explanation is offered, the proper officer is obliged under the law to examine the same and record its own reasons to conclude whether there is satisfactory explanation furnished. 20. If we look into the notice dated 21.09.2023 issued in purported exercise of power under Section 73 of the Act, we find that the notice nowhere records that the explanation offered by the petitioner was not found to be satisfactory. 21. Though learned counsel for the respondents has submitted that this notice reveals consideration on explanation also, we do not find any such consideration in the said notice. The authority has reproduced the provision contained in Section 17(5) of the Act and it has been recorded as below:- "As such, it appears that the input tax credit claimed in the GSTR 3B returns is not available as per section 17(5) of RGST Act and Central GST Act for 2017-18 and is inadmissible in accordance with law." 22. The petitioner has specifically stated in its reply that the lift and air conditioners formed ....
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....nt is not a case where jurisdiction under Section 73 has been assumed on ground other than discrepancies found in the return. 25. In the present case, the invocation of jurisdiction under Section 73 is based on discrepancies found in the return. If that be so, the mandate of Section 61 is required to be followed by the proper officer before assuming jurisdiction under Section 73 of the Act. 26. What is apparent from the record is that initially proceedings under Section 73 were initiated without consideration of the explanation offered by the petitioner and during the pendency of those proceedings the authorities did consider the petitioner's explanation and a communication in form GST ASMT -12 was issued to the petitioner on 29.09.2023. This clearly refers to order of acceptance of reply against notice issued under Section 61 of the Act. The communication says that with reference to reply submitted by the petitioner, details of which are mentioned in the table given therein the reply submitted by the petitioner has been found to be satisfactory and no further action is required to be taken in the matter. This communication is clearly referable to the provisions contained in Sect....