Input Tax Credit mismatch between GSTR 3B and GSTR 2A remanded for fresh adjudication after effective hearing opportunity.

Reversal of Input Tax Credit based on a mismatch between GSTR 3B and auto-populated GSTR 2A was reconsidered where the taxpayer claimed the discrepancy was small and relied on the annual return. Although intimation, show cause notice and a personal hearing notice had been issued, the matter was found fit for fresh consideration with an effective opportunity to explain the mismatch. The order was set aside, the dispute was remanded for fresh adjudication, and relief was made conditional on deposit of 10% of the disputed tax demand and filing of a reply within the stipulated time; the bank attachment was consequently raised.

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Issues: Whether the assessment order reversing Input Tax Credit on account of disparity between GSTR 3B and auto-populated GSTR 2A warranted interference for want of a reasonable opportunity and whether the matter should be remanded for fresh consideration.

Analysis: The impugned order was preceded by intimation, show cause notice and notice for personal hearing, but the petitioner produced the annual return and claimed that the discrepancy between GSTR 3B and GSTR 2A was only Rs.19,341/-. In these circumstances, the dispute on the merits of the tax demand required reconsideration after giving the petitioner an effective opportunity to explain the mismatch. The Court therefore found it just to reopen the matter, subject to a condition that the petitioner deposit 10% of the disputed tax demand and file a reply within the stipulated time, after which a fresh order was to be passed following a reasonable opportunity and personal hearing.

Conclusion: The impugned order was set aside and the matter was remanded for fresh adjudication subject to deposit of 10% of the disputed tax demand, with consequential bank attachment raised; the relief was thus granted in part in favour of the petitioner.

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