GSTR 3B and GSTR 2A Mismatch: Madras HC sets aside GST Demand Order on 10% Pre-Deposit

The Madras High Court recently addressed a GST dispute concerning GSTR 3B and GSTR 2A discrepancies, setting aside a demand order requiring a 10% pre-deposit from the petitioner. The court stressed adherence to natural justice principles, allowing the petitioner to contest the tax demand based on merits. The petitioner had challenged an order by the Deputy Commercial Tax Officer dated April 10, 2024, citing procedural unfairness and lack of awareness during the proceedings. Counsel R. Hemalatha argued for the petitioner's right to Input Tax Credit (ITC), backed by Circular No.183 compliance. The court acknowledged the communication lapse and emphasized the mismatch issue between the petitioner’s returns and auto-populated data. It ruled in favor of the petitioner, ordering a remittance of 10% of the disputed amount and granting an opportunity to respond to the show cause notice within two weeks. The matter requires resolution within three months post the petitioner's submission.