2024 (12) TMI 399 - HC - GST

Wrongful availment of input tax credit as CGST and SGST instead of IGST - mismatch between Form GSTR-2A and Form GSTR-3B due to incorrect reporting of IGST credit - HELD THAT - In the instant case, the notice issued to the appellant, and the demand confirmed against him, were in proceedings initiated under Section 73 of the GST Act. The said provisions are attracted only when it appears to a proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax has been wrongly availed or utilised for any reason. The case here clearly reveals that there has been no wrong availment of credit, and that the only mistake committed by the appellant was an inadvertent and technical one, where he had omitted to mention the IGST figures separately in Form GSTR 3A. The mistake was also insignificant because it is not in dispute that there was no outward supply attracting IGST that was effected by him. The impugned judgment of the learned Single Judge is set aside and the Writ Petition is allowed by quashing Ext.P14 order and declaring that the appellant shall not be seen as having availed excess credit for the purposes of initiating proceedings under Section 73 of the GST Act. Petition allowed.

Issues Involved:

1. Mismatch between Form GSTR-2A and Form GSTR-3B due to incorrect reporting of IGST credit.
2. Demand for return of CGST/SGST amounts allegedly utilized in excess.
3. Legality of proceedings under Section 73 of the GST Act.
4. Revenue neutrality and procedural justice in tax administration.

Issue-Wise Detailed Analysis:

1. Mismatch between Form GSTR-2A and Form GSTR-3B:

The appellant, a registered dealer under GST, incorrectly reported the IGST component in Form GSTR-3B during the assessment year 2017-2018. Instead of showing the IGST amount separately, the appellant inadvertently showed it as nil and added the bifurcated CGST and SGST components to the existing figures. This led to a mismatch between Form GSTR-2A and Form GSTR-3B. It is significant to note that the IGST amount was split into CGST and SGST components in Form GSTR-3B, which was undisputed.

2. Demand for return of CGST/SGST amounts:

The Assessing Authority identified the mismatch and issued a notice demanding the return of the CGST/SGST amounts allegedly utilized in excess. The proceedings culminated in an order confirming the demand against the appellant. The appellant contended that there was no revenue loss or excess credit availed, as the credit was legitimately available due to the IGST paid on inter-state inward supplies.

3. Legality of proceedings under Section 73 of the GST Act:

The proceedings were initiated under Section 73 of the GST Act, which applies when tax has not been paid, short paid, or when input tax has been wrongly availed or utilized. The court found that there was no wrong availment of credit, and the appellant's mistake was a technical one, involving the omission of IGST figures separately in Form GSTR-3B. The court set aside the impugned judgment and quashed the order confirming the demand, declaring that the appellant had not availed excess credit warranting proceedings under Section 73.

4. Revenue neutrality and procedural justice in tax administration:

The court highlighted a similar case where the Assistant Commissioner of Central Tax found that the taxpayer's actions were consistent with the legal framework, emphasizing the revenue-neutral nature of the situation. The court appreciated the timely and effective justice rendered by revenue officials, underscoring the importance of expeditious disposal of cases involving procedural aspects of taxation. The court concluded that there was no loss of revenue, and the appellant's actions were in line with procedural law. The judgment also addressed concerns about the State's share of IGST, directing the GST Council to resolve the issue based on the court's declaration.

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