Input tax credit reconciliation under GST required use of annual returns and available records; orders were quashed and remitted.

Input tax credit claimed in a later year, including credit linked to reverse charge mechanism transactions, had to be assessed with reference to the annual returns and other available records. Reconciliation of the credit was required on that material, and it was not dependent on a reply to the show-cause notice where the relevant information was already with the department. On that basis, the adjudication order and summary order were quashed and the matter was remitted for fresh consideration.

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Issues: Whether the adjudication order and summary order passed under the Goods and Services Tax laws required to be quashed and the matter remitted for fresh consideration where input tax credit of an earlier year was claimed in a subsequent year and the reconciliation of annual returns was not undertaken.

Analysis: The dispute turned on the treatment of input tax credit claimed in a later year, including credit relatable to reverse charge mechanism transactions. It was held that the annual returns and available records had to be taken into account for reconciliation, and that such reconciliation was not dependent on a reply to the show-cause notice where the relevant material was already available with the department.

Conclusion: The adjudication order and summary order were quashed and the matter was remitted for fresh consideration.

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