Law firm Vaish Associates has moved the Delhi High Court challenging an August 6, 2024, order raising the Goods and Services Tax (GST) demand of ₹5.89 lakh [Vaish Associates Vs Commissioner of Delhi GST].

The demand had been raised citing certain discrepancies between the law firm's GSTR-9 and GSTR-9C filings.

When the matter was heard today, a Bench of Justices Prathiba M Singh and Shail Jain initially asked the firm why it did not respond to the show cause notice issued to it in the matter earlier.

“You are a law firm, you didn’t respond to a notice sent to you. How will you respond to notices your clients have received?” the Court orally remarked.

Senior Advocate Kavita Jha, appearing for the firm, submitted that the matter was only a reconciliation issue and that the tax amount, together with interest, had already been paid in 2021 through DRC-03 filings.

It was argued that despite the payment, the absence of a reply to the initial SCN resulted in the impugned order being passed.

Taking note of these submissions, Justice Singh directed GST authorities to verify whether the payments had indeed been made, observing that the reconciliation and payment records (including GSTR-9, GSTR-9C, and DRC-03) were already on record.

“If the department confirms that the payment has been made, the order can be set aside,” the Court said, listing the case for further hearing on September 10.

GSTR-9 is the annual GST return that consolidates all monthly/ quarterly filings, while GSTR-9C is a reconciliation statement comparing GSTR-9 with the audited financials.

GSTR-9 shows the overall tax liability and payments. GSTR-9C, certified by an auditor, ensures accuracy and compliance, highlighting mismatches between returns and financial statements to prevent tax disputes. DRC-03 is a GST form used for voluntary payment of tax, interest, or penalty to settle liabilities or discrepancies.