23.02.2024: ITC Claim can’t be denied solely on the ground that such claim is not reflected in GSTR-3B, where such claims were referred in GSTR-2A and GSTR-9: Madras High Court

MadrasThe Madras High Court in the case of SRI SHANMUGA HARDWARES ELECTRICALS vide 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, allowed the petition by way of remanding the case back to the assessing officer in the case where the registered person asserts that they are eligible for ITC claim by referring to GSTR-2A and GSTR-9 returns, the assessing officer cannot deny such ITC claim merely on the ground that  the GSTR-3B returns did not reflect the ITC claim. 

In this case, the petitioner carries on trade in electrical products and hardware. By asserting that nil returns were erroneously and inadvertently filed in the GSTR-3B returns, the petitioner states that he is eligible for Input Tax Credit (ITC) in respect to assessment years 2017-2018, 2018-2019 and 2019-2020, and the same is duly reflected in the GSTR-2A returns. Further, the petitioner states that GSTR-9 (annual) returns were filed duly reflecting the ITC claims of the petitioner.

The Petitioner submitted that the assessing officer has issued separate assessment orders for each of the aforementioned years, rejecting the claim  solely on the ground that the petitioner had not claimed ITC in the GSTR-3B returns. The Petitioner replied to the show cause notice and stated that the eligible ITC in each assessment period exceeds the tax liability.

The High Court held that when the registered person asserts that he is eligible for ITC by referring to GSTR-2A and GSTR-9 returns, the assessing officer should examine whether the ITC claim is valid by examining all relevant documents, including by calling upon the registered person to provide such documents.  In this case, it appears that the claim was rejected entirely on the ground that the GSTR-3B returns did not reflect the ITC claim.  Therefore, interference is warranted with the orders impugned herein.

The Court here set aside the impugned assessment order by remanding the matters back for re-consideration. The petitioner is permitted to place all documents pertaining to its ITC claims before the assessing officer. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue fresh assessment. 

To read the complete judgment 2024 Taxo.online 345

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