2023 (10) TMI 1042 - HC - GST

Input Tax Credit Claim Reinstated: Evidence Submission Permitted Despite Initial Form Discrepancies Under GST Rules

Mr. Goparaj Gopalakrishnan Pillai Proprietor, M/s. Taurus Communication Versus The State Tax Officer-1 Thripunithura., Joint Commissioner (Appeals) Kottayam,

HC allowed the writ petition challenging the denial of input tax credit. The court set aside the original order and directed the Assessing Officer to ... Disallowance of Input Tax Credit - supplier/dealer had not remitted the tax collected on the supply - HELD THAT:- The question whether input tax credit to a dealer would be denied merely on the ground of non-remittance of tax by the supplier/dealer on the goods/services supplied to the assessee as the same tax is not reflected in the Form GSTR-2A, would be enough to deny the claim of input tax credit to the assessee has been considered in the DIYA AGENCIES VERSUS THE STATE TAX OFFICER, THE STATE TAX OFFICER, UNION OF INDIA, THE CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, THE STATE OF KERALA [2023 (9) TMI 955 - KERALA HIGH COURT] where it was held that If the seller dealer (supplier) has not remitted the said amount paid by the petitioner to him, the petitioner cannot be held responsible. Whether the petitioner has paid the tax amount and the transactions between the petitioner and seller dealer are genuine are the matter on facts and evidence. The petitioner has to discharge the burden of proof regarding the remittance of tax to the seller dealer by giving evidence. Impugned order for denial of input tax credit to the petitioner to the extent of 19,830/- is hereby set aside and the matter is remitted back to the Assessing Office to give one opportunity to the petitioner for giving evidence and documents in support of his claim for input tax credit which has been denied vide order Ext. P1(A). If on examination of the evidence and documents submitted by the petitioner, the Assessing Officer is satisfied that the claim is bonafide and genuine, the petitioner should be given credit of input tax which has been denied by the order, Ext. P1(A). Petition disposed off by way of remand. Issues involved:The judgment involves the denial of input tax credit to the petitioner based on discrepancies in availed credit compared to Form GSTR-2A and Form GSTR-3B, the question of entitlement to input tax credit when the supplier/dealer has not remitted tax, and the applicability of a previous judgment in a similar case.Discrepancy in Input Tax Credit:The petitioner, a registered dealer, availed excess input tax credit of Rs. 33,05,038 for the year 2017-2018. The Assessing Officer noted a variance between the ITC as per Form GSTR-2A and Form GSTR-3B, leading to the disallowance of Rs. 19,830. The petitioner explained the discrepancy attributing it to a clerical error in entering SGST figures. The Assessing Officer imposed interest and penalty along with the disallowed credit.Entitlement to Input Tax Credit:The Assessing Officer contended that the petitioner could only avail ITC if the tax on supplies was remitted by the supplier. Since the supplier had not remitted the tax, the petitioner was deemed ineligible for ITC on those supplies. An intimation of liability was issued under Section 73(5) of the Act, which the petitioner did not respond to. The Assessing Officer relied on a circular to conclude that the petitioner had availed excess credit of Rs. 19,830.Applicability of Previous Judgment:A previous judgment in the case of Diya Agencies v State Tax Officer was referenced regarding the denial of input tax credit based on non-remittance of tax by the supplier. The judgment emphasized that the mere absence of tax in Form GSTR-2A should not be sufficient to deny the claim of input tax credit. The court directed the Assessing Officer to allow the petitioner to provide evidence supporting the claim and to pass a fresh order accordingly.Conclusion:In light of the previous judgment, the High Court allowed the writ petition, setting aside the order denying input tax credit and remitting the matter back to the Assessing Officer. The petitioner was directed to provide evidence within ten days to support the claim for the denied credit. The Assessing Officer was instructed to reevaluate the claim and pass a fresh order based on the evidence presented.