GSTR-3B vs GSTR-2A Mismatch Ex-parte Assessment Set Aside: Madras HC allows to Rely on CBIC Circular for ITC Mismatch [Read Order]

Tvl. VARS Enterprises filed a writ petition challenging an assessment order dated 14 November 2025 passed under Section 74 of the CGST Act, 2017.

The assessment had been completed ex parte after the taxpayer failed to participate in the proceedings initiated by the State Tax Officer.

According to the assessment order, the primary discrepancy identified by the department was related to a mismatch between the Input Tax Credit claimed in GSTR-3B and the details reflected in GSTR-2A.

Based on the mismatch, proceedings were initiated and the impugned assessment order was issued ex parte.

According to the assessee, the issue is covered by CBIC Circular No. 183/15/2022-GST, dated 27-12-2022 which prescribes the manner in which ITC mismatch cases are to be examined and verified.

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The petitioner submitted that it was prepared to furnish a detailed reply along with supporting records and documents in accordance with the circular if a fresh opportunity was granted.

The enterprises also submitted the reasons for not participating in the assessment proceedings. It was submitted that the notices and orders had been uploaded only on the GST portal and were not otherwise brought to the attention of the business.

Its accountant failed to inform it about the notices uploaded on the portal, resulting in the assessment proceedings being completed ex parte under Section 74 of the Act, explained the petitioner to the court.

Justice D. Bharatha Chakravarthy after noting the explanation offered by the taxpayer on merits, Court observed that considering the nature of the dispute and the assessee’s readiness to produce supporting records under the CBIC circular, an opportunity should be afforded to present its case before the assessing authority.

The High Court directed the petitioner to deposit 25% of the disputed tax amount within four weeks from receipt of the web copy of the order. The impugned assessment order would be set aside automatically and would be remanded for fresh consideration if the deposit is made.

The bench also ordered that any bank account attachment effected pursuant to the impugned assessment order would stand lifted once the assessment order was set aside. The writ petition was allowed and the matter was remanded for fresh adjudication accordingly.

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