Celebi Delhi Cargo Terminal Management India Pvt. Ltd. v. Sales Tax Officer, New Delhi
Court: High Court of Delhi
Petition No.: W.P.(C) 7655/2024
Relevant Provision: Section 73 of the CGST Act, 2017 read with corresponding provisions of the DGST Act
Category of Dispute: Output tax liability – GSTR-01 vs GSTR-09 mismatch; Excess demand due to system error
Date of Judgment: 17 September 2024
Facts
The petitioner, Celebi Delhi Cargo Terminal Management India Pvt. Ltd., challenged an adjudication order dated 13.04.2024 passed under Section 73 of the CGST Act for FY 2018-19. The said order emanated from a Show Cause Notice dated 08.01.2024 proposing multiple tax demands on alleged under-declaration of output tax and excess availment of input tax credit. The petitioner had duly submitted its reply on 23.02.2024 and was granted a personal hearing prior to adjudication
The SCN proposed five distinct grounds of demand, including a substantial demand of ₹31.13 crore arising from reconciliation differences between GSTR-01 and GSTR-09. While two minor demands were dropped in adjudication, the remaining demands were confirmed, prompting the present writ petition
Questions for Consideration
Whether the demand confirmed under Section 73 of the CGST Act, based on mismatch between GSTR-01 and GSTR-09, was sustainable when the discrepancy was allegedly caused by a technical glitch in the GST portal resulting in incorrect computation of output tax liability.
Observations of the Court
The Court noted that the principal demand of ₹31.13 crore arose due to a mismatch between GSTR-01 and GSTR-09, specifically relating to advance adjustments reported in Table 11B of GSTR-01. According to the petitioner, the GST portal erroneously added the tax component of advances instead of reducing the same from output liability, leading to artificial inflation of tax dues
Significantly, the Court recorded that an identical issue had arisen for the petitioner in the subsequent financial year 2019-20, where the adjudicating authority, vide order dated 25.08.2024, had accepted the explanation of technical glitch and dropped the proposed demand entirely. This subsequent acceptance materially weakened the foundation of the impugned order for FY 2018-19
Although the Court acknowledged the availability of an alternate appellate remedy, it exercised writ jurisdiction on the ground that the controversy lay in a narrow compass and had already been examined by the department itself for a later period
Judgment
The High Court set aside the adjudication order dated 13.04.2024 and remanded the matter to the adjudicating authority for fresh consideration. The authority was directed to pass a reasoned order after granting a fresh opportunity of personal hearing to the petitioner. Consequently, the scheduled hearing dated 03.10.2024 stood cancelled, and the writ petition was disposed of accordingly
Classification of the Case under GST Law
Output Tax Determination under Section 73 – Procedural error arising from system-generated mismatch in returns
Cases Referred and Their Verdict
| Case | Court | Issue | Verdict |
|---|---|---|---|
| Celebi Delhi Cargo Terminal Management India Pvt. Ltd. (FY 2019-20) | Departmental Adjudication | GSTR-01 vs GSTR-09 mismatch due to advance adjustment glitch | Demand dropped acknowledging technical error |
Between the Fine Lines – Practical Takeaway for Trade
This decision reinforces that demands mechanically raised on return mismatches without appreciating GST portal limitations are legally vulnerable. Where the department itself accepts system errors for subsequent periods, earlier demands on identical facts cannot be sustained without fresh, objective examination. Taxpayers should meticulously document portal anomalies and rely on parity across assessment years to seek relief against inflated demands.
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