Ignoring GSTR-3B and GSTR-9 data is ‘Clear Abdication of Duty’: Calcutta HC set aside Appellate Order [Read Order]

The Calcutta High Court has set aside both the GST ( Goods and Services Tax ) appellate order and the original adjudication order under the GST Act after finding that the authorities failed to examine return data available on the portal which is a “clear abdication of duty.”

Justice Om Narayan Rai also noted that although the grounds raised by the petitioner regarding reversal figures were extracted in the appellate order, there was no discussion or reasoning dealing with those figures.

The background of the matter is that a show cause notice issued under Section 73 of the GST Act to Shine Pharmaceuticals Ltd. It was alleged in the SCN that excess availment of ITC, reversible ITC, and short payment of tax on outward supplies.

As the petitioner had not replied to the show cause notice, the proper officer passed an adjudication order dated 16 January 2024 confirming taxliability on all three counts.

On appeal, the Appellate Authority modified the order by granting partial relief on certain issues but refused to interfere with the finding relating to reversal of ITC. This appellate order dated 28 March 2025 was challenged before the High Court.

Before the Court, the petitioner demonstrated through detailed figures drawn from statutory returns that the ITC liable to be reversed on account of credit notes and place-of-supply discrepancies aggregated to about ₹1.74 crore, whereas the actual ITC reversed as reflected in GSTR-3B and GSTR-9 was higher than the required amount.

The counsel of the petitioner, Adv. Sandip Choraria, by referring to portal data, said that excess ITC had in fact been reversed and therefore no further reversal demand could survive. It was argued that these figures were available on the GST portal itself and should have been verified by the authorities.

The State contended that such detailed facts were not properly placed before the Appellate Authority and that the adjudication had proceeded ex parte due to non-reply to the show cause notice.

Since the relevant figures were already available in statutory returns on the GST portal including GSTR-1, GSTR-3B and GSTR-9, the Appellate Authority was duty-bound to consider them while deciding the appeal, said the court.

Such non-consideration of readily available statutory data, the Court said, constitutes a clear abdication of duty by the Appellate Authority. On this ground alone, the appellate order was found unsustainable and liable to be quashed.

The Court further observed that even the original adjudicating authority had failed to examine the GSTR-3B and GSTR-9 records that were available to it at the time of passing the order.

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