2024 (3) TMI 1264 - HC - GST

Violation of principles of natural justice - denial of Input Tax Credit (ITC) erroneously - non-application of mind - The supplier made a mistake by filing the return in Form GSTR-1 by specifying total integrated tax (IGST) as zero in the relevant column - HELD THAT - The petitioner has placed on record sample invoices pertaining to the purchases made from the supplier in West Bengal. The petitioner has also placed on record the Forms GSTR-1 and GSTR-3B of the supplier. These returns pertain to August 2017. On comparing the two returns it is evident that the contention of learned counsel for the petitioner that an error was committed while filing Form GSTR-1 appears to be prima facie correct. At the end of the day if the supply received by a registered person is genuine and taxes were paid in respect thereof by such supplier there is no reason to deny the benefit of ITC to the registered person in the next leg of the transaction. The assessing officer was of the view that the tax paid by the supplier reached the respective states without reaching the Tamil Nadu State exchequer. The documents on record prima facie indicate that the SGST component reached the State of Tamil Nadu. Therefore the impugned order cannot be sustained. The impugned order is quashed and the matter is remanded to the assessing officer for re-consideration - Appeal disposed off by way of remand.

Summary

Issues involved: Assessment order denying Input Tax Credit (ITC) due to alleged error by supplier in GST returns.

Summary:
1. The petitioner challenged an assessment order denying Input Tax Credit (ITC) on grounds of non-application of mind. The dispute arose from purchases made by the petitioner from a supplier in West Bengal, where the supplier erroneously reported zero IGST in Form GSTR-1 but rectified the error in the GSTR-3B return. The assessing officer did not consider this rectification and denied ITC.

2. The petitioner argued that the supplier had paid the requisite taxes and rectified the error in the subsequent return, making the purchase genuine. The Additional Government Pleader contended that the petitioner should have filed a statutory appeal and disputed questions of facts cannot be addressed under Article 226.

3. The Court examined sample invoices and GST returns of the supplier, finding that the error in Form GSTR-1 was prima facie correct. It emphasized that if taxes were paid by the supplier, the recipient should not be denied ITC.

4. The impugned order stated that the recipient is responsible for verifying ITC claims and rectifying errors, even if made by the supplier. However, the Court noted that the SGST component did reach Tamil Nadu, contradicting the order's reasoning.

5. Consequently, the Court quashed the impugned order and remanded the matter to the assessing officer for re-consideration, directing a fresh assessment order within two months, after providing the petitioner with a reasonable opportunity, including a personal hearing. The case was disposed of with no costs incurred.