Allahabad HC: GST ITC Should Not Be Denied Due to Incorrect GSTIN in GSTR-1

The Hon’ble Allahabad High Court reviewed the matter of M/S Shree Krishna Traders Vs State of UP and another – 2023 (10) TMI 927 – Allahabad High Court and resolved the writ petition by overruling the impugned directive given.

The court remitted the case back to the revenue division for further study, instructing them to issue fresh orders considering the circular. This pertains to cases where Input Tax Credit (ITC) was denied on grounds of a discrepancy between Form GSTR-3B and Form GSTR-2A resulting from an incorrect GSTIN number of the recipient entered in Form GSTR-1.

Key Facts Regarding the Case

M/s Shree Krishna Traders, the petitioner in this matter, filed a writ petition questioning the proceedings composed following Section 74 of the Central Goods and Services Tax Act, 2017. The revenue authority, the respondent in this case, issued a Notice on December 24, 2022, seeking to quash the order dated July 26, 2023, given under Section 74 of the UP GST/CGST Act for the FY 2017-18.

The petitioner’s counsel argued that as per Circular No. 183/15/2022-GST dated December 27, 2022, certain procedures outlined in Paragraph 4 of the circular should be followed when there is a discrepancy in ITC demanded by a registered person in Form GSTR-3B and the ITC available in GSTR-2A due to the supplier erroneously declaring the wrong GST Identification Number (GSTIN) of the recipient in Form GSTR-1.

The petitioner also highlighted that the allowance of ITC to the actual recipient should not depend on the completion of the step taken by the tax department of the registered individual mentioned incorrectly, and these moves should be pursued independently.

The petitioner further contended that the respondent failed to follow the procedures specified in Paragraph 4 of the Circular. The petitioner argued that the impugned order did not grant them the advantage under the GST Circular. Therefore, the petitioner requested that the order be set aside, and the matter be remitted back to the respondent for a fresh decision.

The Court’s Decision in This Matter

The Hon’ble Allahabad High Court, in the matter of M/S Shree Krishna Traders Vs State of UP and another – 2023 (10) TMI 927 – Allahabad High Court, made the following rulings:

• The respondent accepted the submission made by the petitioner and suggested that the matter be remitted back to the concerned authority for a review and based on that issue a fresh order.
• The impugned order was set aside, and the matter was remitted back to the respondent. The writ petition was thus disposed of.
• The court directed the respondent to issue fresh orders within one month from the date of the ruling, considering the circular and other supporting material furnished by the petitioner.