Tax Assessment Quashed: Input Tax Credit Cannot Be Denied Without Proper Evaluation of Taxpayer's Evidence and Supporting Documents

HC allowed the writ petition challenging tax assessment and recovery notices. The court held that denying input tax credit solely based on GSTR 2A and GSTR 3B discrepancies is unsustainable. The Assessing Officer must reexamine the petitioner's evidence and provide an opportunity to substantiate the input tax credit claim, with fresh orders to be passed after comprehensive evaluation.

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Issues:
The issues involved in the judgment are the impugning of Ext. P1 assessment order and Ext. P2 recovery notice dated 20.08.2022 and 24.07.2023, respectively, based on the denial of input tax credit due to the difference between GSTR 2A and GSTR 3B.

Judgment Details:

Issue 1: Impugning of Assessment Order and Recovery Notice
The present writ petition challenges the Ext. P1 assessment order and Ext. P2 recovery notice dated 20.08.2022 and 24.07.2023. The assessment order denied the input tax credit to the petitioner based solely on the variance between GSTR 2A and GSTR 3B.

Issue 2: Precedent and Legal Analysis
The Court referred to the case of Diya Agencies v. The State Tax Officer and highlighted the judgment of the Supreme Court in The State of Karnataka v. M/s Ecom Gill Coffee Trading Private Limited. Additionally, the Calcutta High Court judgment in Suncraft Energy Private Limited v. The Assistant Commissioner, State Tax, Ballygunge Charge was considered. The Court held that denial of input tax credit solely on the basis of differences between GSTR 2A and 3B is not sustainable.

Issue 3: Court's Direction
The Court directed the Assessing Officer to reexamine the evidence submitted by the petitioner regarding the input tax credit claim. The petitioner is to be given an opportunity to substantiate the claim, and if found genuine, the input tax credit should be granted. Merely the absence of tax reflection in GSTR-2A should not be sufficient grounds for denial. The Assessing Authority is instructed to pass fresh orders after evaluating the evidence presented by the petitioner.

Conclusion:
The writ petition is allowed, and the matter is remitted back to the Assessing Authority for a reevaluation of the petitioner's evidence related to the input tax credit claim. The petitioner is required to appear before the Assessing Officer with all supporting evidence on 03.10.2023 at 11.00 a.m. for further proceedings in accordance with the law.

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