ITC Allowed on Wrong GSTIN

[Kamal Aggarwal]

In an interesting matter before the Hon’ble High Court of Allahabad in the case of M/S MY AUTO WORLD (KANPUR) PVT. LTD. VERSUS UNION OF INDIA AND 5 OTHERS [2024 (9) TMI 1483 - ALLAHABAD HIGH COURT], the hon’ble court has held that a taxpayer should be allowed ITC of invoices raised on his other GSTIN within the same State.

In the present case, the petitioner was given two GSTINs by the GST department against single PAN. Several representations made in this regard did not resolve the issue. On audit, GST authorities sought to disallow ITC pertaining to the other GSTN.

The petitioner contended that vide Para 3(d) and 4 of Circular No.183/15/2022-GST, the officers should allow ITC even if suppliers have used the wrong GSTIN. Thus, the ITC from the other GSTIN must be adjusted to the one from which a demand for excess ITC has been raised.

The petitioner relied upon the judgement of M/S SANTOSH KUMAR VERSUS ADDITIONAL COMMISSIONER GRADE-2 AND ANOTHER - 2023 (10) TMI 936 - ALLAHABAD HIGH COURT wherein the court applied this circular and instructed the authorities to issue new orders following the outlined procedures in the circular. The relevant extract of the judgement is reproduced below:

“14. Further, adopting the similar view, this Court in the case of COMMISSIONER, SALES TAX, UP., LUCKNOW VERSUS AGRAWAL ROLLING MILLS - 2003 (4) TMI 550 - ALLAHABAD HIGH COURT  has held that the benefit of circular, which came into existence during the pendency of the appeal, even up to the stage of revision, the benefit of same cannot be denied to the assessee.”

The taxpayers should not suffer due to administrative oversights, such as the issuance of duplicate GSTINs. By allowing the adjustment of ITC as stipulated in the circular and legal precedents referred above, even in cases where the wrong GSTIN was initially used by the supplier, the court affirms the principle of equitable treatment for taxpayers. This approach not only mitigates the negative impact of such errors but also reinforces the idea that tax laws should serve their intended purpose of facilitating compliance rather than creating obstacles.