Demand should not be raised when negative taxable and invoice value arise due to erroneous reporting of Credit Notes

Last updated: 06 May 2024

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Quick Summary

The Madras High Court has ruled that tax authorities should not raise demands when a negative taxable and invoice value arises due to the erroneous reporting of credit notes as Input Tax Credit (ITC). In this case, the petitioner incorrectly reported credit notes, leading to a negative value. The court found that the authorities failed to consider the petitioner's explanation and the lack of actual revenue loss to the government. Consequently, the assessment order was set aside and returned for reconsideration.

Court :
Madras High Court

Brief :
The Hon'ble Madras High Court in the case of Oasys Cybernetics Private Limited v. State Tax Officer [W.P. No. 9624 of 2024 dated April 12, 2024] disposed of the writ petition by setting aside the assessment order in case where the total taxable and invoice value was in negative due to erroneous reporting of Credit Notes as Input Tax Credit ("ITC"), thereby holding that, the demand should not be raised when there is no loss caused to the government in the aforesaid scenario.

Citation :
W.P. No. 9624 of 2024 dated April 12, 2024

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