2020 (9) TMI 1027 - HC - GST

Input Tax Credit - mismatch in the Input Tax Credit claimed in GSTR-3B and that appearing in GSTR-2A during the period April, 2018 - March, 2019 - It is the petitioner s case that the conditions mentioned in Rule 86A of the CGST Rules, 2017 are not satisfied in the present case - HELD THAT - The present writ petition is directed to be treated as a representation to respondent no.1, who is directed to decide the same by way of a reasoned order within four weeks, in accordance with law, after giving an opportunity of hearing to the petitioner and/or its authorized representative. The present writ petition and application stand disposed of.

Summary

Issues:
Challenge to Input Tax Credit block and notice citing a mismatch, seeking directions for rectification and speaking order.

Analysis:

1. The petition challenged an Input Tax Credit block dated 25th January, 2020 and a notice dated 28th January, 2020, citing a mismatch in the Input Tax Credit claimed in GSTR-3B and GSTR-2A for the period April 2018 - March 2019. The petitioner sought directions for rectification and removal of the mismatch due to respondent no.4's failure to mention the petitioner's GST registration number. Alternatively, the petitioner requested a speaking order on its representation dated 20th August, 2020 or reasons to believe recorded prior to the credit block, with an opportunity to file objections.

2. The petitioner contended that the Input Tax Credit was claimed for purchases made from respondent no.4, Indian Oil Corporation, against duly issued tax invoices with the tax deposited to the Government treasury. It was argued that the conditions under Rule 86A of the CGST Rules, 2017 were not satisfied in this case.

3. The petitioner highlighted that the impugned actions were taken without issuing any prior notice or reasoned order. It was argued that the alleged mismatch arose due to respondent no.4's wrongful classification of the sale to the petitioner as a sale to an unregistered entity, despite the invoices containing the petitioner's GST registration number. Respondent no.4 admitted its mistake to the authorities.

4. It was further argued that the approach of the respondents in issuing the credit block and notice was contrary to Rule 71 of the CGST Rules, 2017, as there was no opportunity given to respondent no.4 to rectify the mistake within the stipulated time frame.

5. The court accepted the petition and directed it to be treated as a representation to respondent no.1, who was instructed to decide the matter by way of a reasoned order within four weeks, after providing an opportunity for a hearing to the petitioner or its authorized representative. Until the representation was decided, the status quo with regard to the impugned notice was to be maintained by the parties.

6. The writ petition and application were disposed of accordingly, with the order to be uploaded on the website and forwarded to the counsel via email.