GST demand for ITC difference between GSTR-3B and GSTR-2A upheld, statutory appeal remedy available under Section 107

The Madras HC dismissed a writ petition challenging demand for difference in ITC availed in Form GSTR-3B versus auto-populated Form GSTR-2A. The court held GST enactments constitute a complete code with well-drafted provisions based on experience from previous tax regimes. Technical glitches in system-driven returns cannot justify bypassing statutory procedures. When variance exists between supplier's GSTR-1 and recipient's claimed ITC, proper reconciliation through prescribed forms is mandatory. The court found no exceptional circumstances to waive the alternative remedy rule, noting petitioner had statutory appeal rights under Section 107 of CGST Act, 2007.

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Issues Involved:

1. Discrepancy between ITC claimed in GSTR-2B and information in GSTR-2A.
2. Validity of assessment orders based on discrepancies.
3. Applicability of circulars and press releases for ITC claims.
4. Availability and appropriateness of alternative remedy under Section 107 of CGST Act.

Issue-wise Detailed Analysis:

1. Discrepancy between ITC claimed in GSTR-2B and information in GSTR-2A:

The petitioner challenged the assessment orders for the years 2017-18 and 2018-19 due to differences in the Input Tax Credit (ITC) claimed in GSTR-2B and the information captured in GSTR-2A compared to GSTR-1 of the supplier. The demand was calculated as Rs.8,21,123/- and Rs.3,53,519/- for the respective years. The petitioner argued that discrepancies arose due to suppliers not properly uploading information in their GSTR-1.

2. Validity of assessment orders based on discrepancies:

The petitioner's counsel cited various circulars and press releases, including Circular No.125/44/2019-GST, which emphasized that the proper officer should not insist on invoice submission if details are present in GSTR-2A. The petitioner argued that ITC availed on the strength of invoices issued by suppliers should not be denied due to suppliers' errors in uploading data. The department, however, maintained that the demand was based on proper show cause notice and that ITC claimed in GSTR-3B is provisional, subject to reconciliation with GSTR-2A data.

3. Applicability of circulars and press releases for ITC claims:

The petitioner relied on several clarifications and circulars, including those dated 04.09.2018, 18.10.2018, and 18.11.2019, which addressed issues related to ITC claims and discrepancies between GSTR forms. The court noted that the GST enactments and rules are a complete code, designed to prevent revenue leakage, and discrepancies must be resolved as per prescribed procedures. The court also referenced the Supreme Court decision in Commissioner of Central Excise Vs. M/s.Ratan Melting and Wire Industries, stating that circulars are not binding on the court.

4. Availability and appropriateness of alternative remedy under Section 107 of CGST Act:

The respondent argued that the petitioner had an alternate remedy under Section 107 of the CGST Act and should approach the Appellate Commissioner. The court agreed, stating that the petitioner should exhaust the statutory appeal process. The court highlighted that exceptions to the rule of alternative remedy were not applicable in this case and emphasized that the petitioner should file an appeal within thirty days.

Conclusion:

The court dismissed the writ petitions, providing liberty to the petitioner to file a statutory appeal before the Appellate Commissioner within thirty days. The court concluded that the petitioner must follow the statutory dispensation and that the writ petitions could not be entertained under Article 226 of the Constitution. Consequently, the connected miscellaneous petitions were also closed.

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