GSTR-2A/3B Discrepancy Notice; Portal Service Issue; Opportunity Granted for Reconciliation

Issue: Whether an assessment order and subsequent appeal dismissal are valid when the assessee was unaware of the show cause notice due to its placement in the “Additional Notices/Orders” tab of the GST portal, and whether they should be given an opportunity to reconcile discrepancies between Form GSTR-2A and GSTR-3B.

Facts:

The respondent authority issued a notice to the petitioners regarding discrepancies between Form GSTR-2A and GSTR-3B.
The petitioners were unable to reply to the show cause notice as it was not displayed in the usual “Notice” section of the GST portal, but was uploaded under the “Additional Notices/Orders” tab, which they did not initially notice.
Consequently, the respondent passed an Order-in-Original in Form GST DRC-07 dated October 11, 2023.
The petitioners were unaware of the assessment order until their bank accounts were attached.
Upon becoming aware, the petitioners filed an appeal against the Order-in-Original, but the appellate authority dismissed the appeal, stating it was filed beyond the prescribed period of limitation.
The petitioners filed a writ petition on the ground that the issue raised in the show cause notice was the difference between Form GSTR-2A and GSTR-3B, which required reconciliation.
The petitioners submitted they were ready to cooperate and file a reply to the show cause notice if allowed more time to reconcile the discrepancies.

Decision:

The court acknowledged the petitioners’ submission that they were ready to cooperate and file a reply to the show cause notice if allowed more time to reconcile the discrepancies.
The court issued a show cause notice for final disposal, with a returnable date set for January 16, 2025.
The court granted direct service via email.
As an interim relief, the court directed the respondent authority to take no coercive action against the petitioners during the pendency of the petition.

Key Takeaways:

Portal Service Issues: The court recognized the issue of notices being placed in less visible sections of the GST portal, affecting the assessee’s ability to respond.
GSTR-2A/3B Reconciliation: The court acknowledged the need for reconciliation between Form GSTR-2A and GSTR-3B.
Opportunity for Compliance: The court granted the petitioners an opportunity to reconcile the discrepancies and file a reply to the show cause notice.
Interim Relief: The court provided interim relief by directing the respondent authority to refrain from coercive action.
Section 73 of Central Goods and Services Tax Act, 2017/Gujarat Goods and Services Tax Act, 2017: This section pertains to demands and recovery of tax where there is no fraud, willful misstatement, or suppression of facts.
The court is recognizing the practical issues of online service, and is providing an opportunity to the tax payer to comply.

HIGH COURT OF GUJARAT

Viswaat Chemicals Ltd.

Sales tax Officer

BHARGAV D. KARIA and D.N. Ray, JJ.

R/SPECIAL CIVIL APPLICATION NO. 16217 of 2024

DECEMBER 3, 2024

Ms. Dimple K. Gohil, Adv. for the Petitioner. Chintan Dave, AGP for the Respondent.

ORDER

Bhargav D. Karia – Heard learned advocate Mr.Vishal Agrawal through video conference with learned advocate Ms.Dimple K. Gohil for the petitioners and learned Assistant Government Pleader Mr.Chintan Dave for the respondents.

2.1. Learned advocate Mr.Vishal Agrawal for the petitioners submitted that the petitioners could not file reply to the notice dated 31.07.2023 issued by the respondent-Authority as the same was not reflected on the GST Portal in the Notice section but it was uploaded under the Additional Notices/Orders tab on the Portal.

2.2. It was further submitted that the petitioners came to know about the passing of the Order-in-Original in Form GST DRC-07 dated 11.10.2023 only when the bank account of the petitioners were attached. It was therefore submitted that the Appeal filed by the petitioners was beyond the prescribed period of limitation and the Appellate Authority accordingly dismissed the Appeal on the ground of limitation.

2.3. It was further submitted that the issue raised in the show-cause notice is difference between the Form GSTR-2A and GSTR-3B which requires reconciliation.

2.4. It was submitted that the petitioners are ready and willing to co-operate and file the reply to the show-cause notice within a stipulated time if permitted to provide the reconciliation between Form GSTR-2A and GSTR-3B.

3. Considering the above submissions, issue Notice for final disposal, returnable on 16^th January, 2025. Direct service through Email is permitted.

4. In the meanwhile, by way of ad-interim relief, no coercive action shall be taken by the respondents during the pendency of this petition.