Madras HC: A Lower GST ITC than the Amount Reflected in GSTR-2A is Clear Evidence of Non-Application

The assessment order is been quashed by the Madras High Court which said that the applicant claimed a lower amount as ITC compared to the amount shown in the auto-populated GSTR 2A return. The ITC has wrongly claimed the ITC, which specifies the non-application of mind.

Concerning the interest liability for the late filing of the returns the proof on record shows that the applicant remitted sums of Rs 3,97,353 each towards CGST and SGST on March 6, 2024, the bench of Justice Senthilkumar Ramamoorthy noted.

The applicant is in the business of supplying bricks, blocks, tiles, and ceramic goods. The petitioner said that he is uneducated and computer illiterate. It is asserted that the applicant was not aware of proceedings starting with the issuance of an intimation dated January 19, 2023, and culminating in the impugned assessment order.

The applicant argued that the assessing officer concluded that no additional action was needed. The applicant claimed an input tax credit (ITC) of Rs. 54,000/- each for SGST and CGST in the GSTR 3B return, whereas the auto-populated GSTR 2A return reflected the availability of ITC to the extent of Rs. 3,23,967/- each towards SGST and CGST.

The applicant incorrectly claims the eligible Input Tax Credit, which is patently incorrect and shows complete non-application of mind. Concerning the liability to pay interest, the sum of Rs. 3,97,353/- each towards SGST and CGST was remitted on March 6, 2024. Therefore, a sum of Rs. 10,86,310 was pertinent for the demand under the assessment order from the bank account of the applicant in the Canara Bank.

Both the intimation and show cause notice were served on the applicant via post and not just uploaded on the GST portal, the council argued. He provides that the principles of natural justice were complied with clearly.

The assessment order was quashed by the court and the case was remanded to the assessing officer for reconsideration. The applicant was authorized to furnish an answer to the Show Cause notice within 2 weeks from the receipt date of the copy of this order.

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On receipt thereof, the assessing officer was asked to furnish a reasonable chance to the applicant along with the personal hearing and hence furnished a new assessment order within 2 months from the receipt date of the reply of the applicant.

As from the petitioner’s Canara Bank account, the sum of Rs. 10,86,310/- was appropriated the attachment notice issued to recover the tax demand will stand raised, and the amount appropriated will comply with the consequence of the remanded proceedings.