Ms Doon Iron Store vs. Deputy Commissioner State Tax

Held

The Court disposed of the petition by granting liberty to the petitioner to prefer an application under the second proviso to Section 161 of the GST Act, 2017. The Court directed that if such an application is made, it shall be considered without reference to the limitation period stipulated in the first proviso. The application is to be considered and disposed of on merits by the Assessing Officer (A.O.). Until the disposal of the application under Section 161, no coercive action shall be taken against the petitioner. This relief is subject to the condition that the application under Section 161 is made within two weeks from the date of receipt of the certified copy of the order. The Court did not expressly leave any issue undecided, but the core dispute regarding the assessment order and recovery citation is to be resolved through the Section 161 application.

Facts

The petitioner, M/s Doon Iron Store, approached the High Court of Uttarakhand challenging an assessment order dated February 14, 2025, and a recovery citation dated September 27, 2025. The petitioner alleged that a discrepancy arose due to the non-capturing of GSTR-3B entries and tax paid under the reverse charge mechanism, despite these figures being correctly reflected in the GSTR-3B. This led to a wrongful demand and coercive recovery, with the tax demand allegedly exceeding the petitioner's taxable turnover. The petitioner sought to quash these orders and requested relief under Section 161 of the GST Act.

Key Issues

1. Whether the assessment order dated February 14, 2025, and the recovery citation dated September 27, 2025, are liable to be quashed due to alleged discrepancies in the GSTR-3B entries and reverse charge mechanism payments? (Question of law and fact, concerning the interpretation and application of GST provisions related to tax computation and recovery). Petitioner's contention: The petitioner argued that a discrepancy occurred because their GSTR-3B entries and reverse charge mechanism payments were not properly captured, leading to an inflated tax demand. They prayed for the authorities to consider their case under Section 161 of the GST Act. Respondents' contention: The State/respondents fairly submitted that if there was a miscalculation or an arithmetical error, the department was open to reconsideration, and the matter could be remitted back.