Mismatch GSTR 3B & 2A: Madras HC Overturns the Decision of GST ITC Denial Due to Incorrect GSTIN

The Goods and Services Tax ( GST ) assessment order is been quashed by the Single Bench of the Madras High Court where the applicant was disallowed from claiming the Input Tax Credit for incorrectly mentioning the Goods and Services Tax Identification Number ( GSTIN ) unintentionally.

The applicant contested the GST assessment order through which the ITC claimed via the applicant was disallowed on the foundation that the information furnished in the return of the applicant does not match with that in the GSTR-2A return.

Under applicable GST laws, the applicant is a registered individual. He obtained a GST show cause notice on 27.01.2023 alleging that he incurred an excess ITC claim and that the same was evident on comparing his GSTR-3B return with the GSTR-2A return.

The applicant through the reply specified that the pertinent invoice was issued by the supplier of the applicant M/s. Kirthi Enterprises, however, had incorrectly shown the GSTIN of the sister concern of the applicant, namely Premier Corporations. By specifying that the same answer was not acknowledged and the proposal to levy the tax, interest, and penalty was authorized, the writ petition was filed.

While referring to the GSTR-1 return of Kirthi Enterprises, he said that invoice no 123 was incorrectly displayed as having been issued to Premier Corporation. As the claim of ITC was on the foundation of the genuine purchase by the applicant from Kirthi Enterprises, related counsel furnishes that the impugned order warrants interference.

On behalf of the respondents T.N.C. Kaushik, Additional Government Pleader, accepted the notice and said that the applicant must take recourse to rectification proceedings if the return was incorrectly filed via the supplier.

The Bench remarked, “The documents on record, such as invoice dated 20.09.2017 and the GSTR return of Kirthi Enterprises, prima facie indicate that the Goods and Services Tax Identification Number ( GSTIN ) of Premier Corporation was wrongly mentioned by Kirthi Enterprises in the return. If that is indeed the case, the petitioner would be unjustly deprived of ITC. To provide the petitioner with an opportunity to redress this grievance, interference with the impugned order is called for.”

It was ruled that “the impugned order dated 25.08.2023 is quashed and the matter is remanded to the assessing officer.”

The assessing officer was asked to furnish a reasonable chance to the applicant along with the personal hearing and hence issue a new assessment order in 2 months subsequently.

The bench said, “It is also open to the petitioner to file an appropriate petition, if necessary, to set right the error complained of by the petitioner.”