Adjudication order and demand notice annulled after Department admits factual mistakes in GSTIN entries
In a significant development, the Orissa High Court has quashed the adjudication order and demand notice issued against Subrat Rout under the Odisha Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017. The court's decision comes after the Department admitted to clerical errors, leading to mistaken facts in the assessment of the petitioner for the tax period from December 1, 2018, to December 31, 2018.
The case, brought before the court by petitioner Subrat Rout, challenged the order dated July 27, 2021, passed by the CT & GST Officer, Cuttack-1 City Circle, Cuttack. The adjudication process was initiated under Section 73 of the GST Act, following alleged discrepancies between figures disclosed in returns GSTR-2A and GSTR-3B. However, the petitioner contended that he had not received any payments for the alleged work during the specified tax periods, as his GST registration was already cancelled at the time of adjudication.
The pivotal moment in the case came when the Department acknowledged a clerical error in the GSTIN entry. Payments were mistakenly recorded under the GSTIN of Subrat Rout instead of the actual recipient, Subrat Kumar Rout. This error was highlighted in a letter from the Superintending Engineer, Mahanadi North Division, Jagatpur, to the Assistant Commissioner of CT & GST, Cuttack-I City Circle, confirming that payments were made to Subrat Kumar Rout, not the petitioner.
Mr. Deba Priya Mishra, representing the petitioner, successfully argued for the annulment of the adjudication order, emphasizing the factual inaccuracies and lack of liability for the tax demand in question. The Department's Additional Standing Counsel, Mr. Seshadeb Das, conceded the error, further supporting the petitioner's claims.
The court, presided over by Chief Justice Harish Tandon and Justice Murahari Sri Raman, found no ambiguity in the presented facts and determined that the proceedings against Subrat Rout were indeed based on mistaken identity and erroneous GSTIN details.
As a result, the court quashed the adjudication order dated July 27, 2021, and the related demand notice, thereby allowing the writ petition. The decision underscores the importance of accurate record-keeping and verification in the GST adjudication process, ensuring that taxpayers are not wrongfully burdened due to clerical errors.
Bottom Line:
GST - Adjudication process initiated under mistaken facts against the petitioner who did not receive the alleged payments - Adjudication order and demand notice quashed as factual error admitted by the Department.
Statutory provision(s): Odisha Goods and Services Tax Act, 2017, Central Goods and Services Tax Act, 2017, Section 73, Articles 226 and 227 of the Constitution of India
Subrat Rout v. Commissioner of (C.T. & G.S.T.), Odisha, (Orissa)(DB) : Law Finder Doc Id # 2824239
