Facts of the case:

In this case, the petitioner was issued a show cause notice under Section 73 alleging liability on three counts i.e. excess availment of Input Tax Credit (ITC), short payment of tax on outward supplies, and wrongful availment requiring reversal of ITC.  The petitioner did not submit a reply to the show cause notice. Consequently, the Proper Officer passed an ex parte adjudication order, confirming tax demand on all three counts. 

The Petitioner contended that data available in GSTR-3B, GSTR-9 and other returns already filed on the GST portal, the entire ITC that was required to be reversed primarily on account of credit notes and place of supply discrepancies had already been reversed, and in fact, excess ITC stood reversed. Despite these facts being reflected on the GST portal and raised as specific grounds in appeal, neither the adjudicating authority nor the appellate authority examined or dealt with these figures.

Issue:

Whether the adjudication order under Section 73 and the appellate order under Section 107 could be sustained when both authorities failed to consider and analyse the return data (GSTR-3B, GSTR-9 etc.) available on the GST portal, despite specific grounds being raised regarding excess reversal of ITC.

Held that:

The Court observed that although the petitioner had specifically raised grounds before the Appellate Authority, clearly asserting that ITC to the extent required had already been reversed and that excess reversal had in fact occurred, the appellate order merely extracted those grounds without dealing with them in substance. There was no discussion, reasoning or analysis explaining why the figures reflected in the GST returns were being disregarded.

The Court held that such an approach amounted to a clear abdication of statutory duty by the Appellate Authority. An appellate authority under Section 107 is required to adjudicate on facts and law, particularly when all relevant material is already available on the department’s own portal. The Court further noted that the Proper Officer had also failed to consider the same return data while passing the original adjudication order, despite such information being readily available to the department.

The High Court held that it was undisputed that all the figures relied upon by the petitioner were available on the official GST portal through the statutory returns filed in Forms GSTR-1, GSTR-3B and GSTR-9. In such circumstances, the Appellate Authority was duty-bound to independently examine those figures and adjudicate the dispute on that basis, even if the petitioner had earlier failed to reply to the show cause notice. Therefore, the appellate order and the adjudication order was set aside. 

Case Name: Shine Pharmaceuticals Ltd. Versus Joint Commissioner of Revenue, Large Taxpayer Unit & Ors. dated 28.01.2026

To read the complete judgement 2026 Taxo.online 222