Excess ITC availed in Form GST Returns-3B not reflected in GSTR-2A are not a Ground for Denying Claim of ITC : Kerala HC allows Writ Petition [Read Order]

In a recent case, the Kerala High Court, while allowing the writ petition filed before it, held that excess Input Tax Credit (ITC) availed in Form GST-3B and not reflected in GSTR-2A are not grounds for denying the claim of Input Tax Credit (ITC).

The petitioner, Goparaj Gopalakrishnan Pillai, filed the writ petition due to the disallowance of the excess ITC availed in the GSTR-3B. The petitioner is a registered dealer under the GST Act of 2017. In its GST return for the year 2017-2018, the petitioner had allegedly availed and utilized excess input tax credit of Rs. 33,05,038.

When comparing Forms GSTR-2A and 3B, it emerges that the petitioner accessed extra input tax credit to the tune of Rs. 33,05,038, as the ITC as per Form GSTR-2A was Rs. 65,39,776, but the ITC availed and utilized as per Form GSTR-3B was Rs. 98,44,815.

In reply to the show cause notice issued by the department, the petitioner submitted that they filed a GSTR-3B of December 2017 with the incorrect SGST entered—Rs. 36,47,624.24—instead of Rs. 3,64,764.24. They also claimed not to have used any ITC up to that point. In August 2018, an excess input tax credit of Rs. 22,922.22 was deducted from the GSTR-3B.

The assessing officer argued that taxpayers would be entitled to avail ITC only if the tax charged on such supply is remitted by the counterpart to the Government.

As per Circular No. 7/2021 dated 7th November 2021 issued by the Commissioner of State Goods and Services Tax Department, Kerala, it was concluded that the petitioner was eligible to utilize ITC to the tune of Rs. 65,61,906 during 2017-2018 and thereby availed and utilized Rs. 19,830 of excess input tax credit.

Relying upon the decision of Diya Agencies v State Tax Officer, the bench observed that “Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit.”

After considering the submissions of both parties, the single bench of Dinesh Kumar Singh allowed the writ petition and held that excess Input Tax Credit availed in Form GST-3B and not reflected in GSTR-2A are not grounds for denying the claim of Input Tax Credit.

Therefore, the matter is remitted back to the Assessing Office to give one opportunity to the petitioner for providing evidence and documents in support of his claim for input tax credit, which has been denied.

Advocates K. Latha and Jomton F. Payankan appeared for the petitioner.

To Read the full text of the Order CLICK HERE

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