Grants the taxpayer a chance to challenge the tax demand caused by the mismatch in GST returns and Form 26AS.

A recent court order concerning a dispute between a taxpayer and the tax department regarding a mismatch between the taxpayer's GST returns and Form 26AS.

The Case:

The petitioner challenged an order demanding tax payment due to a discrepancy between their GSTR 3B returns (monthly GST return) and Form 26AS (tax credit statement) for the assessment year 2017-18. The petitioner argued:

• Lack of Notice: They were unaware of the proceedings because the department only uploaded notices on the GST portal and did not send them through any other mode.
• Pre-GST Period: The mismatch arose because Form 26AS reflects transactions for the entire financial year, while their GST returns only cover the period after the implementation of GST on July 1st, 2017.

Court's Decision:

The court acknowledged the petitioner's arguments and found merit in their claims. Here's the breakdown:

• Procedural Lapse: The court observed a lack of proper communication from the department as they didn't follow the principle of natural justice by using multiple modes for sending notices.
• Mismatch Explanation: The court agreed that the pre-GST period could contribute to the discrepancy and directed the department to consider this during the re-assessment.

Relief for the Petitioner:

The court set aside the original order on the condition that the petitioner:

• Deposits 10% of Disputed Tax: This deposit acts as a security measure.
• Submits a Reply to Show Cause Notice: This allows the petitioner to explain the mismatch.

Department's Actions:

The court directed the department to:

• Grant Personal Hearing: The petitioner deserves a chance to present their case in person.
• Issue a Fresh Order: This order will be based on the re-assessment after considering the petitioner's reply and deposit.

GST Case Law Gayathri Construction Versus The Assistant Commissioner

Citation-2024 TAXONATION 1432 (MADRAS)

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