The Court gave 10 days to the petitioner to file a reply, and the proper officer was instructed to pass a new GST order under Section 73(9) within 4 weeks of the personal hearing.
In a significant ruling, in case of M/S Essel Kitchenware Ltd. & Anr. Vs. The Joint Commissioner of State Tax (W.P.A. 11523 of 2024), the Calcutta High Court has nullified an order issued under Section 73(9) of the Central Goods and Services Tax (CGST) Act, 2017, due to a procedural lapse by a consultant. The order, which pertained to M/s Essel Kitchenware Limited and another party for the financial year 2017-18, was challenged in the High Court after the consultant failed to notify the petitioner of a Show Cause Notice (SCN) issued on the GST portal.
The petitioners contended that the SCN dated March 9, 2023, issued under Section 73(1) of the CGST Act, was never communicated to them by their consultant, who managed their GST filings. Subsequently, the consultant resigned without informing the petitioner, leaving them unaware of the pending notice. It was only after hiring a new consultant that the petitioner discovered the order on August 29, 2023.
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During the hearing, the petitioner’s advocate, Mr. Kanodia, explained that an error occurred during the filing of GSTR-3B for FY 2017-18. Input Tax Credit (ITC) on the import of goods amounting to Rs. 2.94 crores had been mistakenly reported in the wrong table. The adjudication officer had pointed out a discrepancy, noting that the ITC on the import of goods reflected in GSTR-2A was Rs. 2.93 crores higher than the amount claimed in the correct table.
Although the petitioner had rectified this error in their annual returns filed in Form GSTR-9, they failed to present this correction to the adjudicating officer at the time, and thus it was not considered.
The respondent’s counsel, Mr. Siddiqui, argued that the order could be appealed and suggested that the petitioners could approach the appellate authority for resolution. However, after reviewing the evidence and hearing both parties, Justice Raja Basu Chowdhury observed that the error appeared genuine and was not considered by the adjudicating officer. Furthermore, the departure of the consultant without proper communication significantly impacted the petitioner’s ability to address the notice.
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In light of these circumstances, the court decided to set aside the order and remanded the case back to the proper officer for fresh consideration. The petitioners were given 10 days to file a reply, and the proper officer was instructed to pass a new GST order under Section 73(9) within 4 weeks of the personal hearing.
Additionally, the court ordered the petitioners to pay Rs. 50,000 to the State Legal Services Authority within 10 days, with proof of payment to be submitted during the hearing. Following this, the writ petition was disposed of.
This ruling underscore the importance of clear communication between taxpayers and their consultants and highlights the court’s willingness to allow rectifications for genuine errors in GST filings.
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