Namaste DOST!

I hope you find this blog in the best of your health.

Yesterday, I received an email from one of our clients with the subject line "High Court Stays mismatch between 3B vs 2A". It was a sensational headline without a doubt, and our client wanted us to check and store the data to be used if the need arises.

As accountable and responsible Tax professionals, it is our duty to cross-verify every piece of information that we get. The reference of the case attached with the Email was of Bharat Aluminum, in which the company had received a notice and recovery order due to a mismatch between GSTR 3B and GSTR 2A from the Department.

Fact of Email 

Bharat Aluminum had filed a Writ Petition in the Honourable High Court of Chhaitsgrah about the same notice and recover order.

Referring to the Press Release dated 04th May 2018 and the Honourable Madras High Court Order in the case of M/s. D.Y. Bethel Enterprises Vs. State Tax Officer [W.P. (MD) No.2127 of 2021], Counsel of Bharat Aluminum, prayed to the Court to direct the department that since it was not their fault but that of their vendor, recovery proceedings should be initiated against them. Henceforth ITC cannot be denied merely because the seller has not uploaded their invoices on time.

The advocate representing the Central Govt. as well as State Government had asked for time and had been given a time of 4 weeks to submit a reply.

The Court had not yet issued any order for quashing of the notice! Although directed M/s Bharat Aluminum to deposit 5% of the recovery order within 15 days to avoid coercive steps.

What We Understand 

Therefore, the headline stating "High Court Stays mismatch between 3B vs 2A" is wholly false and misleading.

What You Understand 

On the other hand, the Press Release actually says that if the vendor is available, represents a running business and is capable of paying the due amount, then the Department should ask for the tax payment from the vendor only.

In case the vendor is unable to pay, the Department should then go and seek the payment from the buyer and not at the first instance, as per the press release. Honourable Madras High Court Order in the case of M/s. D.Y. Bethel Enterprises has also ordered the same

So, this Press Release and the Order from the Court can actually be used to ask the Department about the efforts done on their behalf for getting the payment from the vendor. The order should not be cited in any other case because it can further worsen the situation when it is not relevant.

We had also written a blog on the same topic around 30^th April, and here is a link for you to have a look.

Getting Notice for Reversal of genuinely availed Input Tax Credit?
Here's what to do Next!

What do we learn? 

It is crucial to understand from this instance that you should always cross-verify every information and Email you get and never jump into making decisions based on the information. Information can be misleading and wrong, so as a responsible taxpayer, you should always take care that your decisions are aligned with your company's growth.

If you are also facing a similar kind of confusion related to GST, feel free to contact us to get the best solution!!!

T: 9088883000

E: support@gstdost.com

www.askdost.com 

Thanks & Regards

DOST Vikash Dhanania