GSTR-3B and GSTR-2A mismatch must be tested against binding circular procedure before disallowing input tax credit.

Binding procedural guidance governed adjudication of input tax credit reversals based on mismatch between GSTR-3B and GSTR-2A for the relevant financial year. The High Court held that the adjudicating authority should have considered Circular No. 183/15/2022-GST, which prescribed the procedure for handling such discrepancies in pending matters, even if the assessee had not expressly relied on it. The order disallowing credit was therefore set aside and the matter remitted for fresh consideration, with the petitioner to be given an opportunity to participate further. The Court left open the question whether the circular's applicability depends on the facts of each case.

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Issues: Whether the adjudication order disallowing input tax credit on the basis of discrepancy between GSTR-3B and GSTR-2A could stand without following Circular No. 183/15/2022-GST dated 27.12.2022, and whether the matter warranted remand.

Analysis: The dispute concerned reversal of excess input tax credit solely on the basis of mismatch between GSTR-3B and GSTR-2A. The Circular specifically prescribed the procedure to be followed for discrepancies in the financial year 2017-18, including matters pending adjudication, and the Court found that the adjudicating authority ought to have taken note of it even if the assessee had not expressly relied upon it. The contention that the applicability of the Circular could depend upon the facts of the case was left open for decision after remand.

Conclusion: The adjudication order was set aside and the matter was remitted for fresh consideration, with an opportunity to the petitioner to participate further in the proceedings.

Ratio Decidendi: Where a binding procedural circular governs pending adjudication concerning GSTR-3B and GSTR-2A discrepancies for the relevant financial year, the adjudicating authority must apply it before finalising the demand.

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