Input tax credit cannot be denied solely for GSTR-2A and GSTR-3B mismatch when supporting documents are available.
Input tax credit under the State GST regime should not be denied solely because of a mismatch between GSTR-2A and GSTR-3B where the assessee produces invoices and other supporting material. The High Court noted that the tax shown in GSTR-2A was reflected by the supplier, though with delay, and held that the existing material did not conclusively defeat the claim. The assessment order and recovery notice were set aside, and the assessee was given an opportunity to substantiate the input tax credit claim before the assessing authority on verification of documents.
Issues: Whether input tax credit could be denied merely on the basis of mismatch between GSTR-2A and GSTR-3B, and whether the assessment and recovery orders were liable to be set aside to afford the assessee an opportunity to substantiate its claim.
Analysis: The denial of input tax credit was founded on mismatch between GSTR-2A and GSTR-3B under Section 73 of the State Goods and Services Tax Act, 2017. The assessee asserted that it possessed valid invoices and that the tax collected by the supplier was reflected in GSTR-2A, though with delay. In the circumstances, the claim was not treated as conclusively untenable, and the assessee was found entitled to place supporting documents before the assessing authority for verification.
Conclusion: The denial of input tax credit on the existing material was not sustained. The assessment order and recovery notice were set aside, and the assessee was given an opportunity to establish the claim before the assessing authority.
Final Conclusion: The assessee obtained relief by setting aside the impugned assessment and recovery measures, with the matter left open for reconsideration on production and examination of documents.
Ratio Decidendi: Input tax credit should not be denied solely on a GSTR-2A and GSTR-3B mismatch where the assessee is afforded an opportunity to establish the claim through supporting evidence.
TaxTMI 
AI Drafter ✕
TaxTMI 
