Input Tax Credit dispute over GSTR-2A mismatch remanded for fresh factual examination and hearing

Wrongful availment of Input Tax Credit not reflected in FORM GSTR-2A required fresh factual scrutiny, because the entitlement to credit depended on whether qualifying inward supplies were received and tax was paid to suppliers under Section 16 of the CGST Act. The Court noted that interest and penalty under Section 74 would not be justified if credit was in fact validly availed, but the record needed detailed examination. The impugned order was quashed and the matter remitted for de novo adjudication on merits, with a hearing to the taxpayer.

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Issues: Whether the demand confirming wrongful availment of Input Tax Credit, together with interest and penalty, should be sustained or the matter remitted for fresh consideration.

Analysis: The dispute arose from availed Input Tax Credit not reflected in FORM GSTR-2A. The order noted the tax period, the subsequent payment of tax, and the reliance placed on the departmental circular acknowledging initial implementation issues in GSTR-2A and the conditions governing availment of credit under Section 16 of the Central Goods and Services Tax Act, 2017. The Court observed that if credit was in fact availed on qualifying supplies, interest and penalty under Section 74 would not be justified, but that the issue required a detailed factual examination of records, receipt of supplies, and payment to suppliers. The Court also directed that the petitioner be given an opportunity of being heard.

Conclusion: The impugned order was quashed and the matter was remitted to the respondent for fresh adjudication on merits, after considering the evidence and granting an opportunity of hearing. The petitioner obtained partial relief against the confirmed demand, interest, and penalty.

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