GST return mismatch cases grouped by High Courts where ITC was allowed
Here are the GST return mismatch cases grouped by High CourtsFor any error or feedback pls write back at shaifaly.ca@gmail.com, 9953077844.
Initial period of GST was filled with a lot of issues. Here We have compiled the cases which benefitted the taxpayer and the errors in returns were allowed to be amended by the honourable courts.
Guwahati High court-
M/s Surya Business Private limited Vs the State of Assam
In this legal case, the petitioner has challenged a Show Cause Notice issued under the Assam GST Act, 2017, requiring them to explain why a substantial sum of money claimed as Input Tax Credit (ITC) for the financial year 2018-2019 should not be recovered. This amount includes separate components for SGST, CGST, and IGST, totaling Rs. 27,25,503. The petitioner contends that the ITC was properly claimed based on valid tax invoices and corresponding tax payments to the supplier. They have cited precedents set by the Supreme Court of India and the Calcutta High Court to support their case.
Judgment of Suncraft energy was quoted and considered by the court. Judgment of Bharti Airtel was also considered.
The stay on Notice was given by the honourable high court.
Kerala HC 🌴
GSTR-1 and GSTR-3B Mismatch 📈 (Jose Paul vs. State Tax Officer)
In the case of Jose Paul vs. State Tax Officer, the Kerala High Court addressed a dispute over a GST mismatch. The petitioner, a registered dealer, filed GST returns, but discrepancies between GSTR-1 and GSTR-3B were found. A show cause notice was issued, but due to the absence of the first respondent on the hearing date and no subsequent notification for a new date, the order was passed without a hearing. The court ruled this as a violation of the GST Act’s requirements and set aside the order and notice, directing a fresh assessment with a hearing.
Exporter Relief Despite Mismatch 🚢 (Abi Technologies vs. Customs)
In the case of Abi Technologies vs. Assistant Commissioner of Customs, Madras High Court, the petitioner sought a mandamus to direct the refund of IGST on exports made during July, September, and October 2017. The issue arose from incorrect entries in Form GSTR-3B, which affected the eligibility for a refund. The court emphasized the procedural intent to support export incentives and directed the respondent to verify the petitioner’s data and process the refund, provided the exports and tax payments were validated, emphasizing that procedural technicalities should not obstruct legitimate export incentives.
ITC Claims on Mismatch 🛒 (Mina Bazar Railway Station Road vs. State Tax Officer)
In the Kerala High Court case of Mina Bazar vs. State Tax Officer, the court dealt with a challenge against an assessment order and a recovery notice regarding the denial of input tax credit due to discrepancies between GSTR 2A and GSTR 3B forms. The court referenced previous judgments to conclude that input tax credit should not be denied solely on such discrepancies and remanded the matter for a reassessment. The petitioner was directed to present evidence supporting their claim for a higher input tax credit, after which a fresh order would be passed.
GSTR Discrepancies 🧾 (Henna Medicals vs. State Tax Officer)
In the Kerala High Court case of Henna Medicals vs. State Tax Officer, the court examined the denial of input tax credit based on discrepancies between GSTR 2A and GSTR 3B. The court, referencing previous judgments, ruled that input tax credit cannot be denied merely due to discrepancies between these forms. The case was remanded back to the Assessing Officer to allow the petitioner to present evidence supporting their claim for input tax credit. The petitioner was directed to provide all relevant evidence, after which a fresh assessment would be made.
ITC cant be denied for non appearance in GSTR 2A 🗃️ (Diya Agencies vs. State Tax Officer)
In the Kerala High Court case of Diya Agencies vs. State Tax Officer, the petitioner challenged an assessment order denying input tax credit based on discrepancies between GSTR-2A and claimed amounts. The court remanded the case back to the assessing officer, directing that the petitioner be given an opportunity to present evidence supporting the claimed credits. The judgment emphasized that input tax credit should not be denied merely because it is not reflected in GSTR-2A, provided the taxpayer can substantiate the claims with valid evidence.
Read/download the judgment here.
Rajasthan HC 🏜️
ITC via GSTR-3B Returns 🔄 (Pacific Industries Ltd vs. Union Of India,)
In the Rajasthan High Court case of Pacific Industries Ltd. vs. Union of India, the court addressed the petitioner’s inability to transfer unutilized input tax credit due to the unavailability of Form GST ITC-02A on the GST portal. The company had faced issues following the GST amendment that allowed separate registrations for multiple business locations. The court ruled that the failure to provide the form on the portal deprived the petitioner of the opportunity to transfer credits to its new business units and directed the regularization of the petitioner’s input tax credit accordingly.
Madras HC 🌊
Mismatch Communication Issue 📞 (Mahendra Feeds and Foods vs. GST Deputy)
In the High Court of Madras case of Mahendra Feeds and Foods vs. The Deputy Commissioner of GST and Central Excise, Salem, the court addressed the petitioner’s claim regarding improperly denied Input Tax Credits (ITC) for the financial years 2017-18 and 2018-19. The denial was based on a mismatch between the petitioner’s claims and the supplier’s tax payments. The court held that the show cause notice served as adequate communication of the mismatch under Section 42(3) of the GST Act, and the petitioner failed to rectify this mismatch by providing necessary documentation. Consequently, the court dismissed the writ petition, affirming the order that reversed the claimed ITC.
Correct Annexures for GSTR-3B 📑 (Sun Dye Chem vs. Assistant Commissioner)
In the Madras High Court case of Sun Dye Chem vs. The Assistant Commissioner, the petitioner sought to amend Form GSTR-1 for August to December 2017 due to incorrectly reported credit. The correction was initially rejected as it was past the amendment deadline of March 31, 2019. The court allowed the writ petition, enabling the petitioner to rectify the error and redistribute the credit correctly between IGST, SGST, and CGST. This decision considered the lack of a notified mechanism for such corrections, highlighting the need to permit rectifications when procedural mechanisms fail to support timely amendments.
Belated Cash GST 🕰️ (F1 Auto Components vs. State Tax officer)
In the Madras High Court case of F1 Auto Components P Ltd vs. The State Tax Officer, the court addressed a challenge against an order levying interest under Section 50 of the GST Act for delayed cash remittances and incorrect claims of input tax credit (ITC). The petitioner’s claim regarding the ITC reversal was accepted, leading to the setting aside of the interest levy associated with the ITC. However, the court upheld the levy of interest on delayed cash remittances as mandatory and compensatory. The decision cited the case of Maansarovar Motors Private Limited, which influenced the judgment on the ITC aspect.
M/s. Akshaya Building Solution vs. The Assistant Commissioner of CGST & Central Excise-
In the Madras High Court case of M/s. Akshaya Building Solution vs. The Assistant Commissioner of CGST & Central Excise, the court addressed the petitioner’s challenge against an order that denied the rectification of GSTR-1 statements for specific months in 2017 and 2018 due to missed deadlines. The petitioner argued that the failure to rectify was due to unawareness of a relevant notification allowing such corrections. The court directed the respondent to permit the petitioner to upload the corrected GSTR-1 statements, emphasizing the importance of allowing businesses to correct inadvertent errors to ensure accurate tax reporting and proper credit claims.
Judgment of sun dye chem supra was cited and relied in this judgment.
Deepa Traders vs. Principal Chief Commissioner of GST
In the Madras High Court case of Deepa Traders vs. Principal Chief Commissioner of GST & others, the court addressed the petitioner’s request for a mandamus to correct clerical errors in its GSTR-1 forms for 2017-18. The errors, attributed to initial unfamiliarity with the GST system, included incorrect GSTINs, invoice details, and misallocations between IGST, SGST, and CGST. The court, referencing its previous decisions in similar cases such as Sun Dye Chem and Pentacle Plant Machineries, ruled in favor of allowing the corrections to support accurate tax reporting and enable proper tax credit claims. These cases established a precedent for permitting rectifications of inadvertent errors without malafides.Deepa traders GST judgments of Madras high court
Judgment of Sun dye chem was also considered in this judgment.
Delhi HC 🏛️
GST ITC Denial 🚫 (Bharti Telemedia vs. Union of India)
The validity of section 16(2)(c) was challenged.
GST Refund Reconciliation 🏦 Shivbhola Filaments vs. Assistant Commissioner
In the Delhi High Court case of Shivbhola Filaments Private Limited vs. Assistant Commissioner CGST & Anr., the court dealt with an appeal against rejection of GST refund claims related to an inverted tax structure. The court observed procedural failures including the lack of a proper hearing and failure to allow the petitioner to reconcile the refund claims. Consequently, the court set aside the Order-in-Appeal and the orders by the Adjudicating Authority, remanding the matter for a fresh decision after providing an opportunity for the petitioner to be heard and submit necessary reconciliations.
IGST Refund 🔄 Syschem India vs. Union of India
In the Delhi High Court case of Syschem India Limited vs. Union of India & Others, Syschem India Limited sought a refund of Integrated Goods and Services Tax (IGST) for the financial year 2019-2020 amounting to Rs. 53,97,397, related to 17 export invoices. The petitioner faced issues due to typographical errors in the GST returns filed, which couldn’t be corrected on the GST Network portal. The court was to address these concerns, highlighting the procedural gaps in the GST system that affect the rectification of filed returns. No specific prior judgments were cited that directly influenced the decision in this case.
Calcutta HC 🌉
GSTR 2A and 3B Mismatch 🔄 Suncraft Energy vs. Assistant Commissioner,
In the Calcutta High Court case of Suncraft Energy Private Limited vs. The Assistant Commissioner, State Tax, Ballygunge, the court addressed an appeal concerning the reversal of input tax credit (ITC) availed by Suncraft Energy under the West Bengal Goods and Services Tax Act, 2017. The appellant challenged the reversal of ITC which was denied because certain invoices from a supplier were not reflected in the GSTR-2A for the fiscal year 2017-18. The court set aside the order demanding reversal of ITC, directing that action should first be taken against the supplier before reversing ITC from Suncraft Energy, except under exceptional circumstances. The court referenced the Supreme Court decision in Union of India vs. Bharti Airtel Ltd. and emphasized that non-reflection in GSTR-1 should not impact the taxpayer’s ability to claim ITC if other statutory conditions are met.
Jharkhand HC ⛏️
GST Penalty 📜 Vikash Kumar Singh vs. Commissioner of State Tax
In the Jharkhand High Court case of Vikash Kumar Singh vs. Commissioner of State Tax, the court addressed challenges against show cause notices issued under Section 73 of the JGST Act, 2017. These notices were found vague and lacking in specific contraventions necessary for the taxpayer to respond effectively, leading to their quashing due to non-compliance with principles of natural justice. The court referenced its earlier decision in M/s NKAS SERVICES PRIVATE LIMITED, emphasizing that a summary in Form GST DRC-01 cannot substitute a proper show cause notice. Additionally, the imposition of a 100% penalty was ruled impermissible under Section 73(9), which prescribes a maximum of 10% penalty.
Invoices Non-Uploading 📄 Tycoons Industries vs. Estern Coalfields Ltd
Karnataka HC 🏯
GSTR-3B Changes 🔄 Orient Traders vs. Deputy Commissioner
In the Karnataka High Court case of Orient Traders vs. Deputy Commissioner of Commercial Taxes, the court addressed the petitioner’s request to rectify GST returns for July 2017 and March 2018 due to inadvertent errors in tax credit claims. The court allowed the petitioner to amend the returns, emphasizing the initial transition challenges to the GST regime and the bona fide nature of the errors. This decision was made considering the specific circumstances of the case, ensuring no revenue loss to the state or disruption in the GST credit chain.
Revise GSTR-3B for 3 Years 🗓️ Wipro vs. Assistant Commissioner
In the Karnataka High Court case of Wipro Limited India vs. Assistant Commissioner of Central Taxes, Wipro sought judicial intervention to correct GST returns for the fiscal years 2017-18 and 2018-19 to reflect accurate invoices and enable recipients to claim the correct tax credit. The court considered the complexities introduced by the new GST system and the circular from December 27, 2022, clarifying issues related to input tax credit discrepancies. This allowed for errors made in the GST filing to be rectified to reflect true transactions without penal consequences for honest mistakes.
Wipro-Limited-India-Vs-Assistant-Commissioner-of-Central-Taxes-Karnataka-High-Court
Bombay HC 🌆
Electronic Credit Ledger Year Limit ⏳ Advent India PE vs. Union of India
In the Bombay High Court case of Advent India PE Advisors Private Limited vs. Union of India and Others, the court addressed the petitioner’s request to unblock an input tax credit (ITC) of INR 1.17 Crore, which had been blocked under rule 86A of the CGST Rules 2017. The petitioner argued that the blockage should have ceased one year after its imposition, citing the passage of over 20 months. The respondents had delayed unblocking the ITC, awaiting further documentation from the petitioner. The court, referencing sub-rule (3) of rule 86A and a similar case, M/s. Aegis Polymers vs. Union of India and Ors., ruled in favor of the petitioner, ordering the unblocking of the ITC as the delay was found to be illegal.
Chhattisgarh HC 🌲
ITC Mismatch GSTR-3B with GSTR-2A 🔄 Bharat Aluminium vs. Union of India
In the Delhi High Court case of Bharat Aluminium Company Ltd. vs. Union of India & Ors., the court addressed the legality of a GST assessment order and notice issued against the petitioner. The court found that the final assessment order was passed without proper show cause notice and personal hearing, despite the petitioner’s requests and responses submitted on time. Citing principles of natural justice and faceless assessment rules under Section 144B of the Income Tax Act, the court emphasized that personal hearings should be granted if requested by the assessee. The assessment order was set aside due to procedural irregularities, and the case was remanded for re-assessment with directions to issue a proper show cause notice and to allow for a personal hearing.
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CA Shafaly Girdharwal
CA
New Delhi, India
CA Shaifaly Girdharwal is a GST consultant, Author, Trainer and a famous You tuber. She has taken many seminars on various topics of GST. She is Partner at Ashu Dalmia & Associates and heading the Indirect Tax department. She has authored a book on GST published by Taxmann.
