“Madras High Court Upholds ITC Claim Validity”

Background:

In a recent case (Writ Petition No. 3804 of 2024 dated February 20, 2024), the Hon’ble Madras High Court ruled in favor of Sri Shamunga Hardwares Electricals (“the Petitioner”), emphasizing that credit should not be denied when Input Tax Credit (ITC) claims are not reflected in the Form GSTR-3B return.

Legal Issue:

The central issue revolved around whether ITC should be denied solely because it was not reflected in the GSTR-3B return.

Court’s Ruling:

The Hon’ble Madras High Court, in Writ Petition No. 3804 of 2024, delivered the following key points:

Importance of Valid ITC Claims:

The court noted that a registered person claiming ITC based on GSTR-2A and GSTR-9 returns should have their claim assessed for validity by the Assessing Officer. This assessment should involve an examination of the required documents and may require the registered person to provide additional documentation if necessary.

Rejection of Entire ITC Claim:

The court criticized the Respondent for rejecting the entirety of the ITC claim solely on the basis of GSTR-3B not reflecting the claim. This approach was deemed unjustifiable.

Quashing of Impugned Orders:

The court ruled to quash the Impugned Orders and remanded the matter for reconsideration by the Respondent.