ITC Mismatch in Annual Return filed in GSTR-9 due to Unintentional Error: Calcutta HC directs fresh Adjudication owing to Revenue Neutrality [Read Order]

In a recent case, the Calcutta High Court directed fresh adjudication on the matter of mismatch in annual return filed in GSTR -9 due to Unintentional error and revenue neutrality. Ankit Kumar Agarwal, the petitioner assessee directed the order by which the challenge to the adjudication order passed by the authority dated 15th December, 2023 was rejected directing the appellant to avail the statutory appellate remedy. The question was for consideration is whether the annual return filed by the appellant in GSTR-9 for the financial year 2017-18 can altogether be ignored. The appellant by letter dated 13th September, 2018 addressed to the officer concerned gave a clarification stating that they have filed GSTR-3B return for the period from October 2017 to March 2018, which does not include both Input and Output Cess and they have filed GSTR-1 for the month of October 2017, which does not include Cess but have filed GSTR-1 for November, 2017 to March, 2018, which includes Cess @ 5% and Cess (Specified) amount. The appellant submitted a statement of Cess @ 5% and Specific Cess with all the Input, Output and carried forward amounts for the kind consideration of the officer. Subsequently, another communication was sent on 10th February, 2020 bringing to the notice of the department certain information as contained in GSTR Form-9. The appellant stated that during preparation of data for GSTR- 9, it was noticed by him they have inadvertently missed certain output GST liability on account of Compensation Cess from GSTR-3B returns for the relevant financial year and has also missed equivalent amount of Input tax credit of Cess for such supplies. It was further stated that while filing GSTR- 9, they have corrected the error by showing the exact amount of compensation Cess payable by them during the said period as could be seen from Table 4A of GSTR-9. The appellant further stated that they have shown the actual amount of ITC on compensation Cess in GSTR-9 return filed by them as can be seen from table 6b of the said GSTR-9. Further, it was stated that Input Tax Credit is also matching with the auto populated figures of GSTR-2A. It was submitted that the error was unintentional as GST was a new tax at the relevant time and he is a small assessee and there was no revenue loss to the Government as the entire exercise was revenue neutral and also there was no gain to the appellant by showing incorrect figures in their returns as they have sufficient balance of Input Tax Credit for the same. Therefore, it was submitted that the error was not unintentional, it was without any ulterior motive and mens rea or intent to evade tax. Therefore, the authority was requested to take into consideration the same. However, in the pre-show-cause notice, intimation, which was given on 6th September, 2022, the authority was not inclined to do so and as requested by the appellant on the ground that the GSTR-3B was not rectified within the time permitted. The division bench comprising Chief Justice T S Sivagnanam and Justice Hiranmay Bhattacharya M A viewed that two aspects have appealed to us to send back the matter to the adjudicating authority. First is with regard to the effect of GSTR-9. This being an annual return filed within the extended period oflimitation viz. , upto 7th February, 2020 on account of various notifications issued by the Government due to the Covid pandemic. Therefore, if the GSTR- 9, which was filed within time is not considered, the assessee’s rights would be greatly prejudiced. The second aspect, is the contention of the assessee that the entire matter is revenue neutral. Considering the peculiar facts and circumstances of the case making ,the Court remanded the matter back to the adjudicating authority viz. , the Assistant Commissioner to consider the submissions made by the assessee, afford an opportunity of personal hearing, examine the annual return filed in GSTR-9 and proceed to take a fresh decision on merits and in accordance with law. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

ITC Mismatch in Annual Return filed in GSTR-9 due to Unintentional Error: Calcutta HC directs fresh Adjudication owing to Revenue Neutrality [Read Order]

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ITC Mismatch in Annual Return filed in GSTR-9 due to Unintentional Error: Calcutta HC directs fresh Adjudication owing to Revenue Neutrality [Read Order]

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