Difference between GSTR 2A and GSTR 3B not a valid ground for disallowing ITC

[CA Bimal Jain]

The Hon’ble Kerala High Court, in the case of M/S. HENNA MEDICALS VERSUS STATE TAX OFFICERS, DEPUTY COMMISSIONER (ARREAR RECOVERY) OFFICE OF THE JOINT COMMISSIONER, STATE GOODS AND SERVICE TAX KANNUR, UNION OF INDIA, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, STATE OF KERALA - 2023 (10) TMI 98 - KERALA HIGH COURT  allowed the writ petition and held that the difference between GSTR 2A and GSTR 3B is not a ground for denial of the claim for Input Tax Credit (“ITC”), thereby directed the Revenue Department to examine the evidence placed on record by the assessee and pass fresh orders accordingly.

Facts:

M/s. Henna Medicals (“the Petitioner”) claimed ITC on Goods and Services Tax (“GST”) paid was rejected by the Revenue Department (“the Respondent”) on the ground that there was a difference between GSTR 2A and GSTR 3B vide Order dated December 28, 2021 and Recovery Notice dated September 2, 2023. (“the Impugned Order”)

Aggrieved by the Impugned Order, the Petitioner filed a writ petition praying for setting aside the Impugned Order and claiming ITC for Rs. 2,58,116/- along with interest and penalty.

Issue:

Whether the ITC claim can be denied on the ground that there is a difference between GSTR 2A and GSTR 3B?

Held:

The Hon’ble Kerala High Court in M/S. HENNA MEDICALS VERSUS STATE TAX OFFICERS, DEPUTY COMMISSIONER (ARREAR RECOVERY) OFFICE OF THE JOINT COMMISSIONER, STATE GOODS AND SERVICE TAX KANNUR, UNION OF INDIA, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, STATE OF KERALA - 2023 (10) TMI 98 - KERALA HIGH COURT , held as under:

• Relying upon the judgement of the Hon’ble Supreme Court in the case of THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED - 2023 (3) TMI 533 - SUPREME COURT  and the judgement of Hon’ble Calcutta High Court in the case of SUNCRAFT ENERGY PRIVATE LIMITED AND ANOTHER VERSUS THE ASSISTANT COMMISSIONER, STATE TAX, BALLYGUNGE CHARGE AND OTHERS - 2023 (8) TMI 174 - CALCUTTA HIGH COURT , wherein Court observed that the claim of ITC should not be denied only on the ground that there is a difference between GSTR 2A and GSTR 3B.
• Further relying upon the judgement of the Hon’ble Kerala High Court in the case of DIYA AGENCIES VERSUS THE STATE TAX OFFICER, THE STATE TAX OFFICER, UNION OF INDIA, THE CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, THE STATE OF KERALA - 2023 (9) TMI 955 - KERALA HIGH COURT, the Hon’ble High Court noted that, the difference between GSTR 2A and GSTR 3B should not be the sole basis for denial of the claim for ITC when there is evidence on record to prove that the claim of ITC is bonafide and genuine. Therefore, directed the Assessing Authority to grant an opportunity to the assessee to give evidence to support his claim for ITC.
• Directed that, the matter be remitted back to Respondent for the purpose of examination of the evidence of the Petitioner for claiming ITC and after examination of evidence, the Respondent passes fresh orders in accordance with law.
• Further Directed that, the Petitioner shall appear before the Respondent Officer with all the evidence to support his claim for ITC.

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