2026 (2) TMI 107 - HC - GST

Reversal of Input Tax Credit: portal returns were ignored, orders set aside and matter remanded for fresh adjudication with hearing

Appellate authority failed to consider GST portal records (GSTR-1, GSTR-9, GSTR-3B) and thereby abdicated its duty; the appellate order is set aside for ... Reversal of Input Tax Credit - Duty to consider statutory returns and portal records - Abdication of appellate duty - Setting aside of adjudication and appellate orders - Remand for fresh adjudication with opportunity of hearing - Exclusion of time for limitation - Prohibition on continued recovery pending fresh adjudication - Appellate Authority u/s 107 - HELD THAT:- It is not in dispute that the facts and figures that have been indicated to the Court are all available on the relevant portal of GST authorities in the relevant return Forms i.e. GSTR-1, GSTR-9 and GSTR 3B. In such situation, the Appellate Authority ought to have considered such facts and figures as available on the portal itself and then proceeded to answer the issues that were raised before it. There is no discussion as regards the aforesaid facts and figures in the order impugned and there is nothing to indicate why the amounts mentioned in the said return Forms should not be considered. It is noticed that Ground no. 6 taken by the petitioner in the petitioner’s appeal and Ground II taken by the petitioner in its additional submission before the Appellate Authority which clearly indicate the same argument that has been made before this Court (albeit summarily) have been extracted in the appellate order, yet the same have not been dealt with. Not having done that, there is clear abdication of duty on the part of the Appellate Authority. It is noticed that the Adjudicating Authority/Proper Officer has also not taken into consideration the said records i.e. Form GSTR 3B and GSTR-9, which were available with it while passing the adjudication order. For such reason, the adjudication order dated 16th January, 2024 also stands set aside. The matter is remanded to the Adjudicating Authority/Proper Officer for fresh decision on merits. Needless to mention that the petitioner shall be afforded an opportunity of hearing before passing any adjudication order. Since both the adjudication order as well as the appellate order impugned herein have been set aside, no recovery proceedings on the strength of the said orders can be continued any further. Issues: Whether the appellate order dated 28th March, 2025 and the adjudication order dated 16th January, 2024 should be set aside for failure to consider the petitioners statutory return records (GSTR-3B, GSTR-9, GSTR-1) available on the GST portal and whether the matter should be remitted for fresh adjudication after affording opportunity of hearing.Analysis: The Court examined the availability of figures and records on the GST portal (GSTR-3B, GSTR-9 and GSTR-1) which, according to the petitioner, demonstrated that the input tax credit requiring reversal had already been reversed and that the appellate authoritys order did not discuss or deal with those return figures. The Court noted that the appellate order extracts the petitioners grounds but does not address or analyse the portal data or the submissions relating thereto. The Court further observed that the adjudicating authority similarly did not consider the statutory return records while passing the adjudication order, resulting in an ex parte adjudication. Given that the material relied upon by the petitioner was available on the portal and that neither the adjudicating authority nor the Appellate Authority recorded reasons addressing that material, the Court found a failure to discharge the duty to consider relevant statutory records and to afford the petitioner an effective hearing.Conclusion: The appellate order dated 28th March, 2025 and the adjudication order dated 16th January, 2024 are set aside for failure to consider the statutory return records and for not affording appropriate consideration and hearing; the matter is remanded to the Adjudicating Authority/Proper Officer for fresh decision on merits after affording the petitioner an opportunity of hearing and considering any written note or reply filed by the petitioner.