CBIC Circular on GSTR-2A vs 3B ITC Difference Ignored by GST Dept: Karnataka HC sets aside orders [Read Order]
ITC cannot be disallowed merely on the basis of GSTR-2A and GSTR-3B differences without following the CBIC-mandated procedure.
![CBIC Circular on GSTR-2A vs 3B ITC Difference Ignored by GST Dept: Karnataka HC sets aside orders [Read Order]](https://images.taxscan.in/h-upload/2025/12/13/2111986-cbic-circular-gstr-2a-3b-itc-difference-gst-dept-karnataka-hc-orders-taxscan.webp "CBIC Circular on GSTR-2A vs 3B ITC Difference Ignored by GST Dept: Karnataka HC sets aside orders [Read Order]")
The Karnataka High Court has set aside GST ( Goods and Services Tax ) demand orders passed solely on the basis of differences between Input Tax Credit ( ITC ) claimed in GSTR-3B and reflected in GSTR-2A, holding that authorities cannot ignore binding CBIC Circulars issued on the subject. The Court ruled that failure to follow the prescribed procedure under the CBIC Circular...
The Karnataka High Court has set aside GST ( Goods and Services Tax ) demand orders passed solely on the basis of differences between Input Tax Credit ( ITC ) claimed in GSTR-3B and reflected in GSTR-2A, holding that authorities cannot ignore binding CBIC Circulars issued on the subject.
The Court ruled that failure to follow the prescribed procedure under the CBIC Circular spoils the adjudication process and requires fresh consideration.
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The petition was filed by M/s Abhimaani Structures and Engineering Pvt. Ltd., which had challenged an order passed under Section 73(9) of the CGST Act, 2017 for the tax period 2017-18.
The GST department had disallowed ITC merely due to discrepancies between GSTR-3B and GSTR-2A, without following the procedure laid down in CBIC Circular No. 183/15/2022-GST dated 27.12.2022.
The petitioner argued that the circular was mandatory and directly applicable to the relevant financial years that is 2017-18 and 2018-19 but was completely ignored by the adjudicating authority.
The High Court noted that the CBIC circular specifically prescribes how officers must deal with ITC mismatches for FY 2017-18 and 2018-19, including verification steps and thresholds for discrepancies.
The Court observed that even if the taxpayer did not specifically rely on the circular during adjudication, the GST authority was duty-bound to apply it, as it was binding on departmental officers. Ignoring such a circular, the Court held, causes clear prejudice to the taxpayer.
The Justice S.R. Krishna Kumar quoted the ruling in R.S. Marketing and Logistics (P) Ltd. v. Commercial Tax Officer, where it was clearly held that ITC cannot be disallowed merely on the basis of GSTR-2A and GSTR-3B differences without following the CBIC-mandated procedure.
Accordingly, the Karnataka High Court quashed the adjudication order, summary order, and consequential communications issued by the GST department. The matter has been remanded back to the jurisdictional officer for fresh consideration, with a clear direction to examine the issue strictly in accordance with the CBIC circular.
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