Taxpayer's Claim For Input Tax Credit Cannot Be Denied Merely On Account Of Difference Between GSTR 2A & GSTR 3B: Kerala HC

While allowing a petition filed by Henna Medicals challenging an assessment order and recovery notice issued by the tax authorities, the Kerala High Court reiterated that the taxpayer's claim for input tax credit cannot be denied merely on the difference between GSTR 2A and GSTR 3B.

While reiterating so, the High Court placed reliance on The State of Karnataka v. M/s Ecom Gill Coffee Trading Private Limited [2023 (3) TMI 533 SC], wherein the Supreme Court had established that denying input tax credit to an assessee under the GST regime solely based on the difference between GSTR 2A and GSTR 3B was not justified.

A Single Judge Bench of Justice Dinesh Kumar Singh observed that “the only ground on which the petitioner has been said to have availed the input tax credit is the difference between GSTR 2A and GSTR 3B. This Court, after taking note of the judgment of the Supreme Court in the case of The State of Karnataka v. M/s Ecom Gill Coffee Trading Private Limited as well as Calcutta High Court judgment in Suncraft Energy Private Limited v. The Assistant Commissioner, State Tax, Ballygunge Charge has held that the input tax credit of the assessee under the GST regime cannot be denied merely on the difference of GSTR 2A and 3B”.

Advocate Rajesh Nambiar appeared for the Petitioner, whereas Advocate Reshmita Ramachandran appeared for the Respondent.

After considering the submission, the Bench referred to the case of Diya Agencies v. The State Tax Officer [WPC 29769/2023], where it was observed that the assessment order, which denied input tax credit to the petitioner, could not be sustained, and the matter was remanded back to the Assessing Officer with the directive to provide the petitioner with an opportunity to substantiate their claim for input tax credit.

The Lordship in case of Diya Agencies also emphasized that if, upon examination of the evidence presented by the petitioner, the Assessing Officer was convinced that the claim was genuine and legitimate, the petitioner should be granted input tax credit, added the Bench.

Therefore, the High Court allowed the petition while reiterating that mere absence of the said tax in Form GSTR-2A should not be deemed sufficient grounds to reject the assessee's claim for input tax credit.

In view thereof, the High Court referred the matter back to the Assessing Authority for a thorough examination of the petitioner's evidence regarding their claim for input tax credit, without solely relying on Form GSTR 2A.

Cause Title: M/s Henna Medicals v. State Tax Officer Second Circle, State Goods and Service Tax Department and Ors. [Neutral Citation: 2023: KER: 55979]

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