HC Set Aside Order and Directed AO to Provide Opportunity to Assessee to Establish That Only Eligible ITC Was Claimed

Case Details: Contemporary Leather (P.) Ltd. v. Assistant Commissioner (ST) - [2024] 164 taxmann.com 222 (Madras)

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.
• N. Murali for the Petitioner.
• V. Prasanth Kiran, Govt. Adv. (T) for the Respondent.

Facts of the Case

The department issued show cause notice to the petitioner calling upon to show cause as to why tax liability should not be imposed in respect of the mismatch between the petitioner’s GSTR 3B return and the auto populated GSTR 2A. It submitted reply that GSTR-2A was inapplicable in respect of financial year 2017-2018. Thereafter, the demand order was issued. It filed writ petition and contended that it was in a position to establish that only eligible ITC was claimed, if provided an opportunity.

High Court Held

The Honorable High Court noted that the impugned order imposed tax liability in respect of mismatch between GSTR 3B return and auto populated GSTR 2A. It was also submitted that since GSTR-2A was notified by circular dated 11-11-2019, it was inapplicable in respect of financial year 2017-2018 and the petitioner was in a position to establish that only eligible ITC was claimed.

However, apart from referring to circular 123/42/2019-GST and pointing out that GSTR 2A was notified by said circular, no other documents were enclosed with reply. Therefore, it was held that the impugned order was to be set aside and another opportunity would be provided to petitioner subject to depositing 15% of the disputed tax demand.