Impugned Order liable to be set aside when reply filed by the Assessee in response to the discrepancies raised in returns has not been taken into consideration

Last updated: 24 June 2024

Save Share

Quick Summary

The Madras High Court has ruled that an order can be set aside if an assessee's response to discrepancies raised in their tax returns is not properly considered. In this case, Perfect Assayers (P.) Ltd. successfully challenged an order because their reply to a Show Cause Notice regarding mismatches in returns was ignored. The court found the original order lacked proper reasoning and has remanded the matter for reconsideration.

Court :
Madras High Court

Brief :
The Hon'ble Madras High Court in Perfect Assayers (P.) Ltd. v. State Tax Officer (ST) [W.P. No. 12083 of 2024 dated June 03, 2024] allowed the writ petition and set aside the Order-in-Original and Show Cause Notice when reply filed by the Assessee in response to the discrepancies raised in returns has not been taken into consideration.

Citation :
W.P. No. 12083 of 2024 dated June 03, 2024

The Hon'ble Madras High Court in Perfect Assayers (P.) Ltd. v. State Tax Officer (ST) [W.P. No. 12083 of 2024 dated June 03, 2024] allowed the writ petition and set aside the Order-in-Original and Show Cause Notice when reply filed by the Assessee in response to the discrepancies raised in returns has not been taken into consideration.

Facts

Perfect Assayers (P.) Ltd. ("the Petitioner") has filed a writ petition against the Order-in-Original dated September 28, 2023 ("the Impugned Order") passed by the Revenue Department ("the Respondent") on the ground that the reply to Show Cause Notice dated April 27, 2023 ("the SCN") was not taken into consideration by the officers of the Respondent. The SCN was issued alleging that there is mismatch between the Petitioner GSTR-3B return and GSTR-1 statement as well as the Petitioner GSTR-3B return and auto-populated GSTR-2A.

Issue

Whether Impugned Order liable to be set aside when reply filed by the Assessee in response to the discrepancies raised in returns has not been taken into consideration?

Held

The Hon'ble Madras High Court in W.P. No. 12083 of 2024 held as under:

Opined that, the Operative part of the Impugned Order is bereft of any proper reasoning as the explanation provided in relation to discrepancies as per the SCN by way of reply filed has not been taken into consideration and has not discussed properly the explanation and recorded the reason for rejecting the Impugned Order.
Held that, the Impugned Order is set aside and the matter is remanded back for reconsideration.

OFFICIAL JUDGMENT COPY HAS BEEN ATTACHED

FAQ :

The main issue was whether the Impugned Order was valid when the assessee's reply to discrepancies raised in their tax returns had not been taken into consideration by the authorities.

The Madras High Court decided to set aside the Impugned Order and remanded the matter back for reconsideration, stating that the assessee's reply was not properly considered.

The Show Cause Notice was issued due to alleged mismatches between the company's GSTR-3B return and GSTR-1 statement, as well as between its GSTR-3B return and auto-populated GSTR-2A.

The Impugned Order was set aside because it lacked proper reasoning, as the explanation provided by the assessee in response to the Show Cause Notice was not taken into consideration or properly discussed.