2A–3B Mismatch Demand Remanded Subject to 10% Deposit | HC

Case Details: Elgi Sauer Compressors Ltd. vs. State Tax Officer [2026] 182 taxmann.com 72 (Madras)

Judiciary and Counsel Details

• C. Saravanan, J.
• G. Vardini Karthik for the Petitioner.
• Ms. P.Selvi, Govt. Adv. (tax) for the Respondent.

Facts of the Case

The petitioner challenged an impugned order confirming a demand arising from a mismatch between GSTR-2A and GSTR-3B. It was submitted that the extended period of limitation under Section 74 of the CGST Act was incorrectly invoked. It contended that the preceding show cause notice was unclear and was based solely on an audit report. The mismatch arose due to technical glitches as the GST portal was not fully synchronized with the ICEGATE portal, causing difficulties in claiming input tax credit on IGST transactions. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the impugned order could not be challenged solely on the ground of limitation, as the reply did not engage with the merits of the show cause notice, leaving the jurisdictional officer under CGST with no alternative but to confirm the demand. It was held that the matter should be sent back to the jurisdictional officer for reconsideration. The impugned order was quashed, and directed that 10% of the disputed tax be deposited from the Electronic Cash Ledger within 30 days, in accordance with Sections 16 and 74 of the CGST Act/Tamil Nadu GST Act.