2025 (12) TMI 1185 - HC - GST

Appellate review of unavailed IGST input tax credit claimed in GSTR-9 against CGST/SGST demand, order remanded

The dominant issue was whether the appellate order affirming a demand under s. 73 of the CGST Act, 2017, while rejecting the taxpayer's claim of unavailed ... Dismissal of petitioner’s appeal against an order passed u/s 73 of the said Act of 2017 - petitioner missed to claim Input Tax Credit (ITC) in respect of IGST - HELD THAT:- Evidently, the Appellate Authority has reached the conclusion without indicating as to why the petitioner’s plea was “devoid of logic, facts & proper explanation”. The Appellate Authority has observed that necessary documents were absent but there is no indication as to what were the necessary documents that were absent. The Appellate Authority has observed that representation of the petitioner is absent but such observation appears to be incorrect in view of the fact that a written representation made before the Appellate Authority has been annexed with the writ petition as Annexure P-16 at pages 140-141 of the writ petition. The Appellate Authority has not indicated as to why claiming of ITC in respect of IGST in Form GSTR-9 would not enure to the benefit of the petitioner and as to why the said amount could not be offset with the claim of the department on account of CGST and SGST. The order impugned dated June 25, 2025 passed by the Appellate Authority is set aside and the matter is remanded to the file of the Appellate Authority for fresh consideration, in accordance with law. The Appellate Authority shall take an informed decision on the basis of the law governing therein - Petition disposed off. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether the appellate order dismissing the appeal under the tax statute was vitiated for absence of reasons and for not specifying the 'necessary documents' allegedly missing, despite the assessee's written representation being on record. (ii) Whether, in deciding the appeal, the Appellate Authority was required to consider the effect of ITC claimed in the annual return (Form GSTR-9) and address the assessee's contention regarding adjustment/offset of such ITC against the demanded CGST and SGST, and whether the failure to do so warranted judicial interference. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Validity of the appellate order on the ground of non-speaking reasons and vague findings Interpretation and reasoning: The Court examined the appellate order and found that the Appellate Authority rejected the assessee's plea by stating it was 'devoid of logic, facts & proper explanation' and that relief could not be granted 'in absence of necessary documents' and 'representation'. The Court held that such conclusions were reached without explaining why the plea lacked logic or facts, and without identifying what specific documents were required but missing. The Court further found the observation about absence of representation to be incorrect because a written representation before the Appellate Authority was annexed with the writ petition. Conclusion: The appellate order was set aside for want of an informed, reasoned decision and for recording unsupported/vague findings regarding absence of documents and representation. Issue (ii): Duty to consider ITC claimed in annual return (GSTR-9) and the assessee's offset contention Legal framework (as discussed in the judgment): The controversy arose from proceedings under Section 73, appeal under Section 107, and the assessee's claim of ITC through the annual return (GSTR-9). The Court noted a prior Division Bench view emphasizing consideration of particulars in GSTR-9 so that filing an annual return does not become redundant. Interpretation and reasoning: The assessee's consistent case was that ITC relating to IGST for certain months was missed in monthly returns (GSTR-3B) but later claimed in the annual return (GSTR-9), and that such ITC should be considered and offset against the demand of CGST and SGST, leaving only a reduced differential liability. The Court found that the Appellate Authority did not indicate why ITC claimed in GSTR-9 would not benefit the assessee, nor why such amount could not be considered for offset against the demand. This omission, coupled with the lack of reasons, rendered the appellate decision unsustainable. Conclusion: The matter required reconsideration by the Appellate Authority with a reasoned determination addressing the effect of ITC claimed in GSTR-9 and the assessee's specific contentions; therefore, the Court remanded the appeal for fresh consideration in accordance with law, while expressly declining to decide the merits of entitlement. Relief and directions flowing from the above determinations: The impugned appellate order was set aside and the appeal was remanded for fresh, informed decision-making. The assessee was permitted to file further representation/clarification within two weeks and to bring to the Appellate Authority's notice the asserted payment of the differential tax amount. The Court clarified it had not adjudicated the substantive entitlement, leaving the Appellate Authority free to decide on merits with reasons.