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2023 (9) TMI 998 - HC - GSTAbsence of proper mechanism of matching of credit note of supplier with the ITC reversal by the recipient - validity of provisions of Section 43 of the CGST Act/RGST Act - HELD THAT - The validity of the provision is being challenged more on the ground of workability. For the present it is found that in the absence of their being any statutory obligation cast on the respondent to undertake matching exercise, if the petitioner is willing to claim reduction in tax liability, proof of reversal by the recipient is to be provided by the supplier - In the present case, the petitioner has challenged the validity of the provision more on the grounds of difficulty in collecting such certificate / proof from the recipient. Even according to the petitioner he has been able to collect such certificate / proof in some cases. This matter is required to be considered on the next date of hearing - List the matter on 05.10.2023.
Issues involved:
The absence of a proper mechanism for matching credit notes of the supplier with the ITC reversal by the recipient under Section 43 of the CGST Act/RGST Act. The petitioner raised concerns regarding the lack of a mechanism for matching credit notes of the supplier with the ITC reversal by the recipient, previously mandated under Section 43 of the CGST Act/RGST Act. The petitioner argued that requiring a certificate from the recipient as proof of credit reversal for tax liability reduction is impractical. The petitioner contended that the responsibility of the matching exercise should lie with the department, not dependent on the production of certificates from the recipient. The court noted that the challenge to the provision was primarily based on workability. As there is no statutory obligation for the respondent to conduct the matching exercise, the burden of providing proof of reversal by the recipient falls on the supplier if seeking a tax liability reduction. The petitioner's challenge focused on the difficulty in obtaining such certificates/proof from the recipient, despite managing to collect them in some instances. The court scheduled further consideration of the matter for the next hearing date without granting an interim order. The court directed the counsel for the Union of India to present a suggested mechanism for consideration and listed the case for the next hearing on 05.10.2023.
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