TaxTMI 
TaxTMI 
2026 (2) TMI 726
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....ZG.The Appellant-Taxpayer has challenged the First Appellate Order bearing No. ZD2100922002623X dated 06.09.2022, Order-In-Appeal (OIA), passed by the 1st Appellate Authority, namely the Additional Commissioner of CT & GST (Appeal), Puri Range, Puri, in First Appeal Case No. AD210821009764B, pertaining to the tax period 01.04.2018 to 31.03.2019 (FY 2018-19). The said appeal order arose out of Order No. ZD2104210054090 dated 26.04.2021 Order-In-Appeal (OIA), passed under Section 74 of the OGST/CGST Act, 2017, whereby a demand of CGST and SGST amounting to Rs.27,06,634/-, along with interest of Rs.11,04,582/- and penalty of Rs.27,06,634/-, aggregating to Rs.65,17,849/-, was raised on the allegation that the Appellant had disclosed a lesser tax liability in GSTR-3B as compared to GSTR-1. ii. That for the Financial Year 2018-19, the Appellant had declared an output tax liability of Rs.31,36,18,763/- in GSTR-1, whereas the liability declared in GSTR-3B was Rs.31,09,12,131/-, resulting in an alleged short disclosure of tax liability amounting to Rs.27,06,634/-, comprising of Rs.13,53,317/- under the CGST Act and Rs.13,53,317/- under the SGST Act. iii. That the 1st Appel....
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....as the issue is reconciliatory and revenue neutral. 5. The matter was taken up for hearing through virtual mode on 26.12.2025, 06.01.2026, 13.01.2026 and 21.01.2026. The final hearing in the present appeal was concluded on 21.01.2026. Shri Joydip Rang, Authorized Signatory, appeared on behalf of the Appellant. Shri Saurav Tiberwal, Learned Additional Standing Counsel, along with Shri Kunu Padhi, Learned Joint Commissioner, appeared as Authorized Representatives for the Revenue-Respondents. 6. Memo of the cross objections were also filed by the Respondent on 05.01.2026. It is summarized as hereunder: - i. The Respondent has reiterated the findings recorded by the adjudicating authority as well as the First Appellate Authority and submitted that the Appellant failed to reconcile the mismatch between the tax liability declared in Form GSTR-1 and the tax discharged in Form GSTR-3B in the manner prescribed under the CGST/OGST Act, 2017. It was contended that statutory returns filed under the Act are self-assessed declarations and any variation therein must be duly explained and corrected within the framework of law. ii. It was further submitted that the explanati....
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.... Appellant that the afore-said course of action has been set aside by the Appellant Forum. The Appellant forum, however, did not took into consideration the detailed reconciliation submitted with the supporting documents including Credit notes, Debit notes, invoices and advance adjustments working. The Appellant further submitted that it produced a summary of reconciliation between GSTR-1 and GSTR-3B supported by updated data extracted from the GST portal. 11. It is also submitted by the Appellant that the Appellate Authority not accepted that the difference of Rs. 27,06,634/- was duly supported by documentary evidence and did not involve intent to evade tax. The appeal was partly allowed by the First Appellate Authority. The details of the Reconciliation have been submitted by the Appellant which is quoted below: - Details of Reconciliations and Documentary Basis Particulars GST Amount Concerned Customer Reference/Annexure GST on advance considered in 2017-18 in GSTR-3B not in GSTR-1 Rs. 4,93,322 and advance adjusted in 2018-19 in GSTR-3B not in GSTR-1 Rs.4,93,322 (-) 4,93,322 Shapoorji Pallonji & Co Annex-IV GST on advance considered in 2017-18 in....
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.... by the Hon'ble Supreme Court in "Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar & Company Ors", (2018) 9 SCC 1, [para 24 and 34] and contended that taxation statue calls for strict interpretation. Further reliance is placed on judgment of Hon'ble Supreme Court in "Hamida Vs. Md. Khalil-2001 4 Supreme 21, where in Supreme Court has held that issues not raised before the lower fora cannot be permitted to be raised for the first time at the appellate stage, especially in second appeals. 15. Coming to the last question at first, we find that in the case of Hamida Vs. Md. Khalil-2001, Supra., (08.05.2001) in CA No. 3695 of 2001, the Hon'ble Supreme Court took into consideration the Provision of Section 100 of Code of Civil Procedure, 1908, hereinafter referred as the Code, for brevity, and came to the conclusion that lower appellate court is final court of fact and, therefore, the high court erred in re-appreciating the evidences and without finding the conclusion of the lower appellate court were not based on the evidence, reversed the conclusions of fact on the ground that view taken by it was also a possible view on the fact. The Supreme Court further stated that it is ....
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....4[; or the date, as may be notified by the Government, on the recommendations of the Council, for filing appeal before the Appellate Tribunal under this Act, whichever is later. (2) The Appellate Tribunal may, in its discretion, refuse to admit any such appeal where the tax or input tax credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined by such order, does not exceed fifty thousand rupees. (3) The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or Commissioner of Union territory tax, call for and examine the record of any order passed by the Appellate Authority or the Revisional Authority under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act for the purpose of satisfying himself as to the legality or propriety of the said order and may, by order, direct any officer subordinate to him to apply to the Appellate Tribunal within 2six months from the date on which the said order has been passed [; or the date, as may be notified by the Government, on the recommendations of the Council, for the purpose of filing a....
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....case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent. of the said penalty, in addition to the amount payable under the proviso to sub-section (6) of section 107 has been paid by the appellant.] (9) Where the appellant has paid the amount as per sub-section (8), the recovery proceedings for the balance amount shall be deemed to be stayed till the disposal of the appeal. (10) Every application made before the Appellate Tribunal, (a) in an appeal for rectification of error or for any other purpose; or (b) for restoration of an appeal or an application, shall be accompanied by such fees as may be prescribed. Rule 112 of the CGST Rules, 2017 reads as follows (1) The appellant shall not be allowed to produce before the Appellate Authority or the Appellate Tribunal any evidence, whether oral or documentary, other than the evidence produced by him during the course of the proceedings before the adjudicating authority or, as the case may be, the Appellate Authority except in the following circumstances, namely: - (a) where the adjudicating authority....
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....eal if it is satisfied that the case involves a substantial question of law". Sub-Section (3) of 117 of the CGST Act, 2017 provides High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question and the appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question: Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question. 18. Similarly, Section 118 of the CGST Act, 2017 provides that an appeal shall lie to the Supreme Court- (a) from any order passed by the Principal Bench of the Appellate Tribunal; or (b) from any judgment or order passed by the High Court as provide under Section 117. 19. It is further provided that the Code of Civil Procedure, 1908, relating to appeals to the Supreme Court shall, so far as may be, apply in the case of appeals under this sect....
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.... involved before the Constitution Bench has not direct relevance to the case in hand. In this case we are not deciding any interpretation of any exemption of tax available to an assessee. Here the simple question is whether the assessee has actually short paid taxes or not? 23. The First Appellate Authority while accepting part of the submissions made by the Appellant regarding absence of any fraudulent intent but not accepting the explanation given regarding reconciliation has held as under: - As per above table, it becomes clear that the credit notes are not issued within the prescribed time limit as per section 34(2) of the CGST/SGST Act and in some cases though credit note is issued and disclosed in GSTR-1 but not reconciled correctly in GSTR-9 and GSTR-9C for 2018-19 by reflecting the liability correctly matching with corresponding periodical return in GSTR-3B. The liability for 2018-19 are also not found commensurating in GSTR-9 and GSTR-9C (as discussed at serial iii above). Besides this, the appellant could not establish the reversal of Input Tax Credit by the corresponding recipients who have already utilised the ITC relating to the supply invoices against which the ....
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.... the Appellant are utilized. In this case we are of the opinion that this aspect has to be relooked into by the Learned Proper Officer and Appellant should be given chance to amend his returns by condoning his delay occasioned in the meantime. This view was discussed in course of virtual hearing and Learned Joint Commissioner was not in agreement with same, however, Learned Additional Standing Counsel would submit that such a case will become a precedent and may cause numerous cases to be remanded. We are of the view that every litigation has its own merits and demerit. It has to be decided on its own facts and merits. A cannot be decided on the basis consequences that follow with respect to other litigations. 26. The Learned First Appellate Authority has come to the Conclusion that the view taken by the Learned Proper officer that the timeline prescribed by Sub-Section (2) of Section 34 of the CGST Act, 2017 that such credit notes cannot taken into consideration to decide whether there is short payment of tax. 27. In our considered view every honest taxpayer should be protected and if it is held, he has no intention of evading tax by submitting wrong data or misinformation o....
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....on instructions has examine the different notifications of CBIC Circular no. 254/11/2025-GST dated 27.10.2025 at paragraph 2 instructs as follows:- 2. It is observed that no proper officer has been assigned in respect of the following provisions of the CGST Act and the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as "CGST Rules"): a) xxxx b) Section 75(2) of the CGST Act which provides where any Appellate Authority/Appellate Tribunal/Court concludes that the notice issued under section 74(1) is not sustainable for the reason that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been established against the person to whom Page 2 of 6 the notice was issued, the proper officer shall determine the tax payable, deeming as if the notice were issued under section 73(1) of CGST Act. c) xxxx d) xxxx 30. Thus, it is clear that original Proper Officer who has issued Notice Under Section 74(1) of the CGST Act shall re-determine the tax payable by the Assessee and it cannot be done by the First Appellate Authority or the Tribunal. The natural corollary to such an observation would ....