Input Tax Credit - GSTR 2A vis-a-vis GSTR 3B

[Rupesh Sharma]

The Kerala High Court, in the case of M/S. HENNA MEDICALS VERSUS STATE TAX OFFICERS, DEPUTY COMMISSIONER (ARREAR RECOVERY) OFFICE OF THE JOINT COMMISSIONER, STATE GOODS AND SERVICE TAX KANNUR, UNION OF INDIA, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, STATE OF KERALA  - 2023 (10) TMI 98 - KERALA HIGH COURT , has held the following:

• The benefit of input tax credit (ITC) cannot be denied merely on the ground that there was a difference between the tax amount reflecting in GSTR 2A vis-a-vis the tax amount reflecting in GSTR 3B.

• The court drew inferences from the judgments of the Supreme Court in the case of THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED - 2023 (3) TMI 533 - SUPREME COURT  and the Calcutta HC in the case of SUNCRAFT ENERGY PRIVATE LIMITED AND ANOTHER VERSUS THE ASSISTANT COMMISSIONER, STATE TAX, BALLYGUNGE CHARGE AND OTHERS - 2023 (8) TMI 174 - CALCUTTA HIGH COURT 

• The court further relied on Para 8 of its own judgment in the case of DIYA AGENCIES VERSUS THE STATE TAX OFFICER, THE STATE TAX OFFICER, UNION OF INDIA, THE CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, THE STATE OF KERALA - 2023 (9) TMI 955 - KERALA HIGH COURT , wherein it was held that ITC cannot be denied to the assessee merely because the amount of tax did not reflect in GSTR 2A.

• The High Court allowed the writ petition and remanded the matter back to the Assessing Authority to examine the submissions of the petitioner and pass fresh orders, wherein the fact that the amount of tax did not appear in the GSTR 2A shall not be the deciding factor for denial of ITC.

Conclusion: This is yet another welcome judgment, given the fact that the Department is issuing notices one after the other in cases where there is a mismatch between GSTR 2A and GSTR 3B. In a way, the judgment also upholds the doctrine of impossibility, wherein an assessee cannot be denied the benefit conferred upon him under the law, citing reasons that are beyond his control.