Credit should not be denied when ITC not reflected in GSTR -3B is claimable based on GSTR-2A and GSTR-9

The Hon’ble Madras High Court in the case of M/S. SRI SHANMUGA HARDWARES ELECTRICALS, REPRESENTED BY ITS PROPRIETOR, MR. R. SHANMUGAM VERSUS THE STATE TAX OFFICER - 2024 (2) TMI 1126 - MADRAS HIGH COURTallowed the writ petition, thereby holding that, Credit should not be denied when ITC claim is not reflected in Form GSTR-3B return in case where the Assessee filed nil return erroneously in Form GSTR-3B, but claimed ITC by relying upon Form GSTR-2A and Form GSTR-9.

Facts:

Sri Shanmunga Hardawares Electricals (“the Petitioner”) is engaged in the business of trade in electrical products and hardware. The Petitioner filed nil return erroneously in GSTR-3B. However, the Input Tax Credit (“ITC”) was duly reflected in GSTR-2A, based on which GSTR-9 (annual returns) were filed duly reflecting the ITC as claimed by the Petitioner.

However, the Revenue Department (“the Respondent”) rejected the ITC claim of the Petitioner solely on the ground that, the Petitioner has not claimed ITC in GSTR-3B returns vide Assessment Order dated September 30, 2023 (“the Impugned Order”).

Aggrieved by the Impugned Order, the Petitioner filed a writ petition before the Hon’ble High Court.

Issue:

Whether Credit should be denied when ITC claim is not reflected in Form GSTR-3B return?

Held:

The Hon’ble Madras High Court in the case of M/S. SRI SHANMUGA HARDWARES ELECTRICALS, REPRESENTED BY ITS PROPRIETOR, MR. R. SHANMUGAM VERSUS THE STATE TAX OFFICER - 2024 (2) TMI 1126 - MADRAS HIGH COURT held as under:

• Noted that, when the registered person contends that, he is eligible to claim ITC, by relying upon GSTR-2A and GSTR-9 returns, the Assessing Officer should examine whether the claim of ITC is valid by examining the required documents, further calling upon the registered person to provide the required documents.
• Opined that, the entire claim of ITC was rejected by the Respondent on the ground that, GSTR-3B did not reflect the ITC claim.
• Held that, the Impugned Orders are quashed and matter be remanded back for reconsideration.

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