ITC Mismatch demand set aside by High Court because authorities failed to consider certificate obtained by buyer from the supplier and CA of supplier.

 

AP STUDIO ENTERPRISES V. THE ASSISTANT COMMISSIONER (ST) (FAC)

High Court:

The High Court has set aside the order dated 29.12.2023 and remanded the matter for reconsideration.

Petitioner:

1.Challenged the order dated 29.12.2023.
2.Received a show cause notice on 29.09.2023 and replied on 16.10.2023, explaining the discrepancy between GSTR 3B and GSTR 2A due to the belated filing of GSTR 1 by the supplier.
3.Was unable to upload the reply on the portal.
4.Obtained certificates from the supplier and their Chartered Accountant, which were submitted with a rectification petition that was recently rejected.

Revenue:

1.Argued that the petitioner had a reasonable opportunity to contest the tax demand but failed to submit a reply through the GST portal.

High Court’s Decision:

1.Found that certificates and emails provided by the petitioner were not considered in the impugned order.
2.Set aside the order and remanded the matter for reconsideration.
3.Allowed the petitioner 15 days to submit a reply to the show cause notice with all relevant documents.
4.Directed the respondent to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within two months of receiving the reply.