GST Act | Orissa High Court Quashes Recovery Proceedings Premised On 'Mistaken Identity' After Verifying Payment Receipt From Bank
The Orissa High Court in a matter involving 'mistaken identity' where one individual was assessed despite having a cancelled registration number (GSTIN), has quashed Show Cause Notice under Section 73 of the CGST Act, 2017. A Division Bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman noted the 'mistaken fact' in Section 73 adjudication proceedings....
The Orissa High Court in a matter involving 'mistaken identity' where one individual was assessed despite having a cancelled registration number (GSTIN), has quashed Show Cause Notice under Section 73 of the CGST Act, 2017.
A Division Bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman noted the 'mistaken fact' in Section 73 adjudication proceedings. It was clarified that Section 73 was invoked on the premise there was an alleged mismatch in figures disclosed by 'Subrat Rout' instead of a 'Subrat Kumar Rout' in the returns vis-à-vis receipt of amount towards works contract, pertaining to the tax period December 2018.
A Show Cause Notice was issued for initiation of recovery proceedings under Section 73 by way of attachment of immovable property against the Petitioner for non-payment of GST totalling to about ₹15 lakhs.
Petitioner, Mr. Subrat Rout submitted that its GST registration had already been cancelled before adjudication. Further, it was contended that the GST Department mistakenly assessed it since no payments were received in respect of the alleged works contract during the period December 01, 2018 to December 31, 2018.
Due to a clerical error, the Petitioner's GSTIN was wrongly entered in TDS/returns. It was also highlighted that Petitioner who was allotted GSTIN in the name of “Subrat Rout”, had never received payment of such amount towards execution of work.
The Orissa High Court noted that the clerical error was acknowledged by the Superintending Engineer, Mahanadi North Division, Jagatpur, and confirmed by CT & GST Department. From the written instructions submitted by the Department, the Orissa High Court inferred that
“Further, cross examination of the Bank Account Details also reveals that M/s. Subrat Rout bearing GSTIN 21BBPPR1202L1ZR has not received the payments as communicated in the SCN.”
Accordingly, the Orissa High Court allowed the writ petition as the entire adjudication was based on a clerical error.
Case Detail: Subrat Rout vs. The Commissioner of (C.T. & G.S.T.), Odisha and others
For Petitioner: Advocate Deba Priya Mishra
For Respondent: Additional Standing Counsel Seshadeb Das