ITC Can’t Be Denied Solely on Ground that Assessee Had Not Availed ITC in GSTR-3B,But Reflected in GSTR- 2A and GSTR- 9 | Madras HC

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.

• Ms P. Jayalakshmi & S. Muthu Venkataraman for the Petitioner.

• T.N.C. Kaushik for the Respondent.

The Madras High Court, through Order No. Writ Petition Nos. 3804, 3808 & 3813 of 2024 and W.M.P.Nos. 4105, 4107, 4110, 4111, 4116 & 4119 of 2024 dated 20.02.2024, granted the petition and directed the case to be reconsidered by the assessing officer. The situation involved a registered individual, SRI SHANMUGA HARDWARES ELECTRICALS, who claimed eligibility for Input Tax Credit (ITC) based on GSTR-2A and GSTR-9 returns. The petitioner argued that despite filing nil returns in the GSTR-3B, they were entitled to ITC for the assessment years 2017-2018, 2018-2019, and 2019-2020, as evidenced by GSTR-2A returns. Additionally, the petitioner asserted that GSTR-9 (annual) returns accurately reflected their ITC claims.

Despite the petitioner's explanation that nil returns in GSTR-3B were filed erroneously, the assessing officer issued separate assessment orders for each year, rejecting the ITC claim solely on the basis of non-disclosure in GSTR-3B. In response to a show cause notice, the petitioner emphasized that the eligible ITC for each assessment period exceeded the tax liability.

The Madras High Court emphasized that when a registered person asserts ITC eligibility based on GSTR-2A and GSTR-9 returns, the assessing officer must scrutinize the claim's validity by examining all relevant documents. It noted that the rejection solely due to non-disclosure in GSTR-3B warrants interference.

The Court nullified the assessment order, remanding the matter for re-consideration. The petitioner was permitted to submit all documents related to ITC claims, and the assessing officer was instructed to afford a reasonable opportunity, including a personal hearing, before issuing a fresh assessment.

Download the copy of the order:

Sri-Shanmuga-Hardwares-Electricals-Vs-STO-Madras-high-court.pdf

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