Mismatch Between GSTR-3B and GSTR-2A Requires Opportunity for Explanation.

Mismatch Between GSTR-3B and GSTR-2A Requires Opportunity for Explanation.

Issue: Whether an assessee should be given an opportunity to explain a discrepancy between GSTR-3B and GSTR-2A returns before a final assessment order is passed, especially when the assessee did not respond to initial notices.

Facts:

• The assessee, engaged in machinery trading, filed returns and paid taxes.
• Scrutiny revealed a mismatch between GSTR-3B and GSTR-2A.
• The assessee did not respond to notices/intimations issued by the Revenue.
• The assessee sought an opportunity to explain the discrepancy.

Decision:

• The impugned assessment order was set aside, subject to the assessee depositing 10% of the disputed tax within 4 weeks.
• The order was to be treated as a show cause notice.
• The assessee was directed to submit objections with supporting documents within 4 weeks.
• The Revenue was directed to pass orders after giving a reasonable opportunity for a hearing.
• If the conditions were not complied with, the impugned order would stand restored.
• The writ petition was disposed of.
• The ruling was in favor of the assessee conditionally.

Key Takeaways:

• Discrepancies between GSTR-3B and GSTR-2A require thorough examination and an opportunity for the assessee to provide explanations.
• Even when an assessee fails to respond to initial notices, courts may still provide an opportunity for a hearing.
• Conditional orders, such as requiring a deposit of a percentage of the disputed tax, can be used to ensure compliance.
• Section 73 of Central Goods and Services Tax Act, 2017/Tamil Nadu Goods and Services Tax Act, 2017 applied to this case.