TaxTMI 
TaxTMI 
2026 (9) TMI 1186
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....under the jurisdiction of Central Tax administration of Bengaluru West GST Commissionerate. The genesis of the dispute is the information gathered by the officers of the antievasion wing, GST Commissionerate, Bengaluru West as a result of which the allegation of mismatch was made between the input tax credit ("ITC") claimed in Form GSTR 3B returns and the ITC available in Form GSTR-2A, for the period from July 2017 to November 2021. 2) The Superintendent, Anti Evasion Wing had issued a communication dated 28.12.2021 to the appellant directing furnishing of information and details of inward supplies for the period from July 2017 to November 2021. The details were furnished vide letter dated 13.1.2022. On verification of returns, it was noticed that the appellant had availed excess ITC for Rs. 2,74,20,293/-. The appellant submitted a letter on 18.1.2022 admitting to the lapses and the tax along with interest was paid on 18.1.2022. An investigation was initiated by the department vide O.R. No.52/2021-22 dated 21.1.2022 and the statement of the proprietrix was recorded. The proprietrix admitted the factum of excess availment of ITC but the same was due to oversight. It was further s....
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....authority confirmed the imposition of penalty at 100% of the tax as the appellant had not paid the penalty at 15% of the tax, along with the tax and interest, as required under section 74 of the Act. Hence, the present appeal before this Tribunal. Submissions by the appellant and the respondent 7) Ms. Disha Gursahaney, learned counsel appeared for the appellant and contended as under: (a) that entire tax and interest was paid prior to initiation of investigation proceedings, during the information gathering/ verification stage itself. Once the assessee has paid the entire tax liability along with interest, the proceedings shall be deemed to have been concluded as per Section 73 and Section 74 would come into play only if applicable conditions under Section 73 have not been met; (b) the mismatch of ITC between Form GSTR 3B and Form GSTR-2A had resulted primarily from the third-party default and not due to default of the appellant. Such procedural variance does not constitute "suppression of facts" under Explanation 2 to Section 74, as there was neither non-declaration nor withholding of information from the department; (c) the extended period of limi....
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....hat the payment was made pursuant to the investigation made by the authorities and hence section 74 was rightly invoked. 13) The Supreme Court in the case of (2026) 45 Centax 361 (Tata Steel Limited Vs. Union of India) laid down the principles to be kept in mind for invoking Section 74. The Court held as follows: "11. At the outset we have to notice that the proceedings under Section 73/74 can be initiated only on the satisfaction of the Assessing Officer. Even if observations/objections are made on audit, the Assessing Officer should enter his satisfaction before a notice is issued. Insofar as a notice under Section 74, the satisfaction should be not only of mismatch of ITC and short payment of tax having occurred, as is alleged in this case, the Officer should be satisfied that either fraud/willful misrepresentation/suppression had led to such mismatch or short payment of tax." "14. It is not mere lip service to the provisions that is intended when an extended limitation period is provided for recovering an excess benefit availed, short payment or excess refund, from the assessee, especially when the allegation is of fraud/willful misrepresentation/suppressio....
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....n by the DGGI. The GST Tribunal, Thiruvananthapuram bench in the decision reported in (2026) 45 Centax 325 (Tri-GST-Kerala) (Santhome Latex Enterprises Vs. the Commissioner of CGST, Thiruvananthapuram), had held that every act of transgression of section 16(2)/42(1) of the CGST Act cannot be termed as violation inviting proceedings under section 74 of the CGST Act unless clear and categorical evidence has been adduced to the effect that the said transgression was the result of fraud or willful mis-statement or suppression of facts with an intent to evade tax. 16) The existence of mismatch can enable a proper officer to determine the tax liability under Section 73 but for the purpose of invoking Section 74, something more has to be done by the proper officer as stated by the Supreme Court in the case of Tata Steels limited (cited supra). There must be a clear link between the mismatch and the alleged fraud, wilful mis-statement or suppression of facts. In the present case, the demand arose as a result of mismatch between the ITC claimed in Form GSTR 3B and the ITC available in Form GSTR-2A. Form GSTR-2A is a statement available in the common portal enabling the tax payers and the....