Non-reflection of tax in Form GSTR2A not  Sufficient Ground to deny ITC: Kerala HC [Read Order]

The Kerala High Court has held that non-reflection of tax in Form GSTR2A is not sufficient ground to deny the Input Tax Credit (ITC). While setting aside the impugned order for denial of input tax credit,the bench remitted the matter back to the Assessing Office to give one opportunity to the petitioner for giving evidence and documents

Mr.Goparaj Gopalakrishnan Pillai, the petitioner filed the writ petition impugning Show Cause Notice and assessment order whereby the petitioner's claim for the input tax credit to an extent of Rs.19,830/- has been proposed to be disallowed vide show cause notice and vide order, it has been disallowed. Interest and penalty have been imposed to an extent of which Rs.12,742/-and Rs.20,000/respectively along with disallowed input tax credit have been ordered to be paid by the petitioner (total amount is Rs.52,572/-).

The petitioner is a registered dealer under the GIST Act 2017 with GSTIN No.32ANPPP5159DIZV. The petitioner in its return of GST for the year 2017-2018 had availed and utilised (including both CGST & SGST) allegedly excess input tax credit of Rs.33,05,038/-. The ITC as per Form GSTR-2A was Rs.65,39,776/-, whereas the ITC availed and utilised as per Form GSTR-3B was Rs.98,44,815/-.

While comparing the form GSTR-2A and 3B, it appeared that the petitioner had availed excess input tax credit to an extent of Rs.33,05,038/-. The petitioner was issued a show cause notice dated 26.08.2022 to which he filed a reply on 3rd October 2020. In response to the notice issued, the petitioner stated that he mistakenly entered SGST of Rs.36,47,624.24 instead of Rs.3,64,764.24 in GSTR-3B of December 2017 (difference amount of Rs.32,82,860/-). The petitioner also submitted that he had not utilised ITC till the said date. Excess input tax credit of Rs.22,922.22 was deducted in the GSTR-3B of August 2018 (Financial Year 2018-2019).

The Assessing Officer held that the taxpayer would be entitled to avail ITC only if the tax charged on such supply is remitted by the counterpart to the Government. The supplier/dealer had not remitted tax collected on the supply nor uploaded such supply details in his return. It was held that the petitioner was not entitled to avail ITC on such supplies for which the supplier/dealer had not remitted the tax collected on the supply. An intimation of liability in Part-A of Form GST DRC-01A under Section 73(5) of the Act was issued to the petitioner.

It appeared that the petitioner did not file any reply to the said intimation. The Assessing Officer taking note of Circular No.7/2021 dated 7th November 2021 issued by the Commissioner of State Goods and Services Tax Department, Kerala, concluded that the petitioner was eligible to utilise ITC to the tune of Rs.65,61,906/- during 2017-2018 and thereby availed and utilised Rs.19,830/-, excess input tax credit.

In the case of Diya Agencies v State Tax Officer, it was held that “Merely on the ground that in Form GSTR2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit. The petitioner is directed to appear before the assessing authority within fifteen days with all evidence in his possession to prove his claim for a higher claim of an input tax credit.”

A single bench member comprising Justice Dinesh Kumar Singh set aside the impugned order for denial of input tax credit to the petitioner to the extent of 19,830/- and the matter is remitted back to the Assessing Office to give one opportunity to the petitioner for giving evidence and documents in support of his claim for input tax credit which has been denied vide order.

“If on examination of the evidence and documents submitted by the petitioner, the Assessing Officer is satisfied that the claim is bonafide and genuine, the petitioner should be given the credit of input tax which has been denied by the order.”, the bench viewed.

The petitioner is directed to appear before the Assessing Officer within ten days with all evidence in his possession to prove his claim for an input tax credit of Rs.19830/- which had been denied to the petitioner. After examination of the evidence and documents placed by the petitioner/assessee, the Assessing Officer is directed to pass fresh orders by law.

To Read the full text of the Order CLICK HERE

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