M/s. Southern Engineering Services v. Deputy State Tax Officer

The Hon’ble Madras High Court in the case of Southern Engineering Services v. Deputy State Tax Officer allowed the writ petition and set aside the assessment order thereby holding that, the assessment order is liable to be quashed in case where Petitioner incorrectly reported turnover in GSTR-1 but correctly in GSTR-3B.

Southern Engineering Services supplied services to an SEZ unit without charging any GST as the said supply was zero rated supply. The Petitioner incorrectly reported the turnover under the column taxable value in Form GSTR-1 but corrected the mistake by reporting is as zero-rated supply in Form GSTR-3B. However, the Department passed the assessment order against the Petitioner.

The Hon’ble Madras High Court held that, as per the invoice placed on the record by the Petitioner, the supply was made to the SEZ unit and therefore, the said supply would fall within the purview of zero-rated supply and the error in return was at the time of introduction of GST.

The court quashed the assessment order while observing that the Petitioner is entitled to an opportunity for hearing as per the facts and circumstances of the case.

W&B Comments: Despite the availability of an alternative remedy of appeal to the Petitioner, the Hon'ble High Court chose to entertain the present case and remanded it for reconsideration and emphasized on the necessity of providing the taxpayer with a personal hearing opportunity. This ruling is relevant as it establishes a precedent wherein if the violation of principles of natural justice is raised, the alternative remedy may be bypassed, allowing the High Court to address the concerns of the aggrieved taxpayer.

Dated: May 17, 2024

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