HC Remanded Matter as Demand Was Raised Merely on Ground That Assessee Failed to Reply to SCN Issued by Dept.

Case Details: Sri Krishna Fabricators (India) (P.) Ltd. v. Assistant Commissioner (ST) - [2024] 162 taxmann.com 259 (Madras)

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J
• Raveendran B. for the Petitioner.
• V. Prashanth Kiran, Govt. Adv. (T) for the Respondent.

Facts of the Case

The petitioner was a manufacturer of fabricated metal products. The department issued a show cause notice alleging that the tax proposal pertained to the difference between Input Tax Credit (ITC) available as per the GSTR-2A and the ITC availed of under the petitioner’s GSTR-3B returns. However, the petitioner did not respond to the notice and the department passed an order demanding the tax.

The petitioner filed writ petition before the High Court and contended that the tax liability was imposed on the petitioner although the petitioner availed of lower ITC than that reflected in the GSTR-2A.

High Court Held

The Honorable High Court noted that the ITC available in the auto-populated GSTR-2A exceeded the ITC availed of in the petitioner’s GSTR-3B returns. Prima facie, in those circumstances, GST liability would arise only if there was sales suppression but the liability was imposed on account of non-submission of reply. Thus, the Court observed that the petitioner failed to submit reply and it can’t be absolved of responsibility in this regard. Therefore, the Court held that the impugned order was to be set aside and matter was to be remanded for re-consideration on condition that the petitioner would remit 10% of the disputed tax demand.