2026-VIL-258-GSTAT-BLR
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SGST Tribunal

GST - Status of para-wise remarks filed by the officer who passed the order-in-original - Appellant challenged an order-in-appeal upholding a demand under Section 73 of the CGST Act, 2017 and named the Commercial Tax Officer who passed the order-in-original as a respondent - The para-wise remarks were filed by that officer, and the Appellant contended that he was an interested party who could not speak for the other respondents, that the remarks defended the order-in-original rather than the order under appeal, and that they appeared to have been prepared with an AI tool - Whether the para-wise remarks can be read as the stand of the Revenue - HELD - The Appellant himself named the officer as a respondent in Form GST APL-05, and a party to an appeal is entitled to answer it. The officer has no personal stake in the result and acts for the Revenue, whose interest is that the tax lawfully due, and no more, is collected. The remarks gain no added weight because they come from the officer who passed the order, and they lose none. The objection that he could not speak for the other respondents does not survive, as the State Representative filed written submissions for all the respondents - Where an appellate authority affirms the decision under appeal, that decision merges in the appellate decision, so the Revenue may support the demand on the reasons given in either order. How a party prepares its pleadings is its own choice, since the content must rest on the record and the law, and the substance of pleadings is to be considered rather than their form. Read for their substance, the remarks state the Revenue's answer to each ground, and the Appellant met that answer in his rejoinder - The para-wise remarks are taken as the stand of the Revenue, and the issue is answered in favour of the Revenue - Natural justice - Opportunity of hearing before the adjudicating authority and the FAA - Appellant received an intimation in Form GST DRC-01A and an SCN, filed a reply to the SCN, did not attend any of the four hearings fixed by the adjudicating authority, and was heard by the FAA - Whether the principles of natural justice were followed in the proceedings below - HELD - The record shows that an opportunity of hearing was given at every stage - A person who is given an opportunity and does not use it cannot later say that he was denied it, and the Appellant pointed to no document relied on but not supplied and no request for a hearing that was refused. Section 160(2) protects the service of a notice or order from a belated challenge and does not answer the Appellant's grievance, as service was not disputed. Natural justice, however, requires more than fixing dates of hearing, since the noticee must be told the case he has to meet and his reply must be considered before a decision is taken against him - The grievances that the explanation was rejected for a reason never put to the Appellant and that the documents produced in appeal were not considered concern the treatment of the explanation and are examined on merits - The Appellant was given an opportunity of hearing at every stage, and the issue is answered against the Appellant on this limited aspect - Jurisdiction - Whether scrutiny of returns under Section 61 with a notice in Form GST ASMT-10, or an audit under Section 65 ending in Form GST ADT-02, is a condition precedent to a notice under Section 73 of the CGST Act, 2017 - HELD - The Act rests on self-assessment, and scrutiny, audit and adjudication occupy different fields. Section 61 and Section 65 are mechanisms of verification which end in an intimation of discrepancies or in findings, and neither has any power to determine tax. Section 73 is a self-contained machinery of determination with its own trigger, pre-notice intimation, SCN, reply, hearing and appealable order - Section 61(3) and Section 65(7) point to Section 73, whereas Section 73 points back to neither and speaks only of where it appears to the proper officer, which requires material on record and not suspicion - Where the only material is a discrepancy in the registered person's own returns, fairness calls for him to be told of it and allowed to explain it, and that purpose was served by the intimation in Form GST DRC-01A. The words correctness of returns and discrepancies are not peculiar to Section 61 and do not identify the power used. Section 160(1) cures a mistake of form and cannot supply jurisdiction, but jurisdiction was not absent - The absence of Form GST ASMT-10 and Form GST ADT-02 does not by itself invalidate the proceedings, and the challenge to jurisdiction fails - Effect of findings in scrutiny or audit on the adjudicating authority - Section 61(2) and Section 65 of the CGST Act, 2017 read with Section 73(9) - Appellant contended that a discrepancy noticed in a scrutiny or an audit binds the officer who later adjudicates under Section 73 - Whether findings of a scrutiny or an audit bind the adjudicating authority - HELD - A scrutiny ends in an intimation and an audit ends in findings, and neither determines a liability, so there is nothing to bind. Res judicata and estoppel do not operate in this manner in tax proceedings, and an intimation processes a return without assessing it. The closure under Section 61(2) bars further action only in this regard, which covers the discrepancy explained on the material then before the officer and is not a determination of tax - Section 73(9) casts a quasi-judicial duty of determination on the proper officer after considering the representation of the noticee, who must come to the SCN with an open mind. An authority that treats an audit finding as settling the matter adopts the judgment of the auditor and turns the hearing into a formality - The rule works both ways, since the registered person is not bound by the discrepancies reported against him and the Revenue is not bound by a favourable audit or a closed scrutiny when it acts under Section 73 on other material - Findings of a scrutiny or an audit do not bind the adjudicating authority for or against the registered person, and the issue is decided accordingly - Competence of an officer of the Audit wing to proceed under Section 73 without an audit - Whether Section 65(7) bars an officer of the Audit wing from proceeding under Section 73 without an audit - HELD - Section 73 confers its power on the proper officer, and the power attaches to the function assigned and not to a designation. The assignment issued by the Joint Commissioner authorised action under Section 73, nothing was shown to the contrary, and a word in a designation cannot take away a function assigned by law - The maxim expressio unius est exclusio alterius cannot be applied, since it would make Section 61(3) and Section 65(7) exclude each other, and the rule that a special provision prevails over a general one resolves a conflict that does not exist here. The reading urged would require a full audit to examine a difference visible on the common portal and would lead to absurdity - The Board's instructions and circulars on scrutiny and audit selection cannot impose a restriction on a statutory power which the Act does not contain - Section 65(7) enables action under Section 73 on the results of an audit and neither confers nor confines the power, the officer to whom the function was assigned had jurisdiction, and the objection fails - Demand under Section 73 on difference between GSTR-1 and GSTR-3B - Burden of proof and treatment of the explanation of duplicate reporting - Whether the Appellant has shown that the excess of tax in GSTR-1 over GSTR-3B is one supply reported twice, on whom the burden lay - HELD - Tax is charged on a supply, and a return reports a supply but cannot by itself create one. A difference between GSTR-1 and GSTR-3B is legitimate material and a lawful foundation for the notice, but it is not conclusive proof of a further taxable supply. The burden moves in stages, as the Revenue discharge
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