GSTAT Bengaluru upheld an Audit-wing officer’s jurisdiction to act directly under Section 73, but deleted tax on a supply reported twice in GSTR‑1 after deductors’ GSTR‑7 data confirmed the error.

GSTAT Bengaluru has held that a proper officer may proceed directly under Section 73 of the CGST Act without a prior scrutiny under Section 61 or an audit under Section 65, but that a difference between GSTR‑1 and GSTR‑3B is evidence, not conclusive proof, of a further taxable supply. [Radikan Engineers & Consultants v. Commissioner of Commercial Taxes, Government of Karnataka, 2026-juristway.com-3174-GSTAT(Bengaluru)-GST]

The Bench of Prabhakaran P.M., Judicial Member, and Ravi Jesuraj S., Technical Member (State), allowed the appeal of an eighty-year-old proprietor executing works contracts for government departments. Ravi Jesuraj S. wrote the order.

For 2019-20, the appellant’s GSTR‑1 showed tax of ₹1,11,540 under each Act more than its GSTR‑3B. He said a taxable value of ₹18,59,000 had been entered twice, in September and December 2019, and pointed to the deductors’ GSTR‑7 returns. The adjudicating authority rejected this because duplicate entries could let recipients take credit twice; the first appellate authority held that an unamended return kept full force.

On jurisdiction, the Bench held that Sections 61, 65 and 73 occupy different fields, and that Section 73 is triggered whenever it appears to the proper officer, from material, that tax was short paid. Section 65(7) is enabling and does not confine the power to cases arising from an audit, and the Audit-wing officer had been assigned the Section 73 function. It relied on Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate (2025 INSC 982). The DRC‑01A had given the appellant a chance to explain.

On merits, the figures reconciled: GSTR‑1 turnover of ₹73,08,000 less the repeated ₹18,59,000 equalled the GSTR‑3B turnover of ₹54,49,000, which with ₹10,00,000 taxed the next year matched the GSTR‑7 turnover of ₹64,49,000. “Doubt is a reason to inquire. It is not a reason to tax,” the Bench said. The double-credit ground was outside the notice, and B2C supplies in Table 7 do not reach any recipient’s GSTR‑2A.

The demand of ₹1,11,540 under each Act, with interest and penalty, was set aside, and the Revenue’s request for further verification was declined. The Bench added that the appellant shared responsibility for the dispute by filing returns carelessly and not answering the DRC‑01A.

2026-juristway.com-3174-GSTAT(Bengaluru)-GST