Input tax credit mismatch under GST circular led to remand for fresh consideration of the assessment order.

Madras HC dealt with reversal of input tax credit based on a mismatch between GSTR-3B and GSTR-2A. A subsequent GST circular laid down a verification procedure for such ITC differences under Section 16(2)(c) of the CGST Act, 2017, including the requirement of supporting certificates depending on the quantum of mismatch, and it stated that the procedure would apply to pending adjudication and appeal proceedings. Because the impugned assessment order had not been considered in the light of that circular, it was set aside and the matter was remitted for fresh orders after applying the circular to the facts.

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Issues: Whether the impugned assessment order confirming reversal of input tax credit on the basis of mismatch between GSTR-3B and GSTR-2A was liable to be set aside and remitted for fresh consideration in the light of the subsequent GST circular.

Analysis: The dispute arose from variations between the input tax credit claimed in GSTR-3B and the auto-populated credit in GSTR-2A. A subsequent Board circular provided the procedure for verification of ITC mismatch under Section 16(2)(c) of the Central Goods and Services Tax Act, 2017, including the calling for supporting certificates depending on the quantum of difference. The circular also stated that it would apply to ongoing proceedings and to adjudication or appeal proceedings still pending. In view of that instruction and the nature of the dispute, the existing order was found unsuitable to be sustained without reconsideration under the circular.

Conclusion: The impugned order was set aside and the matter was remitted to the respondent for fresh orders after applying the circular to the facts of the case.

Ratio Decidendi: A subsequent departmental circular governing verification of input tax credit mismatch can be applied in pending adjudication matters, and an assessment order passed without such consideration may be set aside and remitted for fresh decision.

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