Ignoring GSTR-9 Causes Prejudice To Taxpayer's Rights When Errors Committed Are Revenue Neutral: Calcutta High Court

The Calcutta High Court has held that ignoring GSTR-9 causes prejudice to taxpayers's rights when errors committed are revenue neutral.

The bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya has remanded the matter back to the adjudicating authority, viz., the Assistant Commissioner, State Tax, Taltala, and New Market Charge, to consider the submissions made by the assessee, afford an opportunity of personal hearing, and examine the annual return filed in GSTR-9.

Form GSTR-9 is an annual return to be filed once for each financial year, by the registered taxpayers who were regular taxpayers, including SEZ units and SEZ developers.

The issue raised was whether the annual return filed by the appellant in GSTR-9 for the financial year 2017-18 can altogether be ignored.

The appellant/assessee brought to the notice of the department certain information as contained in GSTR Form 9. The appellant stated that during the preparation of data for GSTR-9, it was noticed by him that they had inadvertently missed certain output GST liabilities on account of compensation cess from GSTR-3B returns for the relevant financial year and also missed the equivalent amount of input tax credit of cess for such supplies. While filing GSTR-9, they corrected the error by showing the exact amount of compensation owed by them.

The appellant stated that they have shown the actual amount of ITC on compensation cess in the GSTR-9 return filed by them, as can be seen from the GSTR-9. The input tax credit is also matching the auto-populated figures in GSTR-2A.

The appellant stated 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. Also, there was no gain to the appellant by showing incorrect figures in their returns as they have a sufficient balance of input tax credit for it. Therefore, the error was not unintentional; it was without any ulterior motive or mens rea or intent to evade tax. Therefore, the authority was requested to consider it. However, in the pre-show-cause notice, which was given on September 6, 2022, the authority was not inclined to do so, as requested by the appellant, on the ground that the GSTR-3B was not rectified within the time permitted.

The appellant submitted representation, but the adjudicating authority in the order dated December 15, 2023, maintained the same stand.

The court said, “In our considered view, 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 is an annual return filed within the extended period of limitation viz. , up to February 7, 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 that has persuaded us is the contention of the assessee that the entire matter is revenue neutral.”

The court has held that the appellant had filed the GSTR-9 within the extended period of limitation due to COVID-19 pandemic-related notifications and recognized the challenges faced by taxpayers during the pandemic, while remanding the matter back to the adjudicating authority.

Counsel For Appellant: Rajeev Kumar Agarwal

Counsel For Respondent: Anirban Ray

Case Title: Ankit Kumar Agarwal Versus The Assistant Commissioner of State Tax, Taltala Charge & Ors.

Case No.: M.A.T. 939 of 2024 With IA No. CAN 1 of 2024

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