Issue on Submission of GSTR -1 based on CBDT Circular: Kerala HC Remands matter for Re Adjudication [Read Order]

The Kerala High Court remanded the matter for readjudication on the issue of the Submission of GSTR -1 based on the Central Board of Direct Taxes ( CBDT ) Circular.

Mr. Abraham K. J., Counsel for the petitioner and Ms. Reshmita Ramachandran, Government Pleader.

M/S Kochi Medicals, the Petitioner is a registered dealer under the CGST/SGST Act, 2017 provisions.  After the GST regime was rolled out w.e.f. 01.04.2017, the petitioner filed a return for the period from July 2017 to March 2018 in GSTR – 3B.  A notice in Form GST ASMT – 10 dated 08.07.2020 was issued to the petitioner regarding his claim for an input tax credit on supplies he received from the supplier/dealer. 

The ground for issuing the said notice was that there was a mismatch in GSTR – 3B filed by the petitioner and GSTR – 2A for the input tax credit he claimed. The assessing authority on the ground of mismatch between GSTR – 3B filed by the petitioner and GSTR – 2A disallowed the input tax credit paid by the petitioner to the extent of the mismatch.  Aggrieved by the said order, the petitioner had filed an appeal.  However, the same came to be dismissed by the impugned order.

The Counsel for the petitioner submitted that this was the initial stage of implementation of the GST provisions and the dealers faced difficulties in understanding, uploading and correctly filing returns.  The Central Board of Indirect Taxes and Customs considered these difficulties and issued Circular No. 183/15/2022-GST dated 27.12.2022 giving relaxation to the dealers in respect of the financial years 2017-18 and 2018-19. 

It was mentioned in the circular that where a supplier has filed Form GSTR – 1 as well as return in Form GSTR – 3B for a tax period, but had failed to report a particular supply in Form GSTR – 1 and due to the said failure on the part of the supplier/dealer, the supply received by the recipient dealer did not get effected in Form GSTR – 2A, in such cases, returns in ITC claimed by the registered person in the Form of GSTR – 3B and that available in Form GSTR – 2A is to be handled as per the procedure prescribed in para 4 of the said Circular. 

It was further provided that where a supply was made to a registered person and an invoice was issued as per Rule 46 of CGST Rules containing GSTIN of the recipient, but supplier had wrongly reported the said supply as B2C supply, instead of B2B supply, in his Form GSTR – 1 due to which the said supply did not get reflected in Form GSTR – 2A of the said registered person, in such cases, the difference in ITC claimed by the registered person in his return in Form GSTR – 3B and that available in Form GSTR – 2A  should be handled by following the procedure as provided in para 4 of the said Circular.

The Counsel for the petitioner submitted that the petitioner would have filed the 2nd appeal before the Tribunal but, in the absence of the constitution of the said Tribunal, the petitioner has approached the Court.

The court of Justice Dinesh Kumar Singh set aside the impugned orders in and remanded the matter back to the assessing authority to consider the case of the petitioner afresh in the light of the  Circular No. 183/15/2022-GST dated 27.12.2022. 

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