Credit should not be denied when ITC not reflected in GSTR -3B is claimable based on GSTR-2A and GSTR-9

The Madras High Court has ruled that Input Tax Credit (ITC) should not be denied simply because it wasn't reflected in the GSTR-3B return. In this case, the petitioner had erroneously filed a nil return in GSTR-3B but had correctly claimed the ITC in their GSTR-2A and annual GSTR-9 filings. The court quashed the assessment order that rejected the ITC solely on the GSTR-3B omission and remanded the matter for reconsideration, emphasising that the Assessing Officer should examine the validity of the claim using GSTR-2A and GSTR-9.

The Hon'ble Madras High Court in the case of Sri ShamungaHardwares Electricals v. State Tax Officer [Writ Petition No. 3804 of 2024 dated February 20, 2024] allowed the writ petition, thereby holding that, Credit should not be denied when ITC claim is not reflected in Form GSTR-3B return in case where the Assessee filed nil return erroneously in Form GSTR-3B, but claimed ITC by relying upon Form GSTR-2A and Form GSTR-9. 

Facts

Sri Shanmunga Hardawares Electricals ("the Petitioner") is engaged in the business of trade in electrical products and hardware. The Petitioner filed nil return erroneously in GSTR-3B. However, the Input Tax Credit ("ITC") was duly reflected in GSTR-2A, based on which GSTR-9 (annual returns) were filed duly reflecting the ITC as claimed by the Petitioner.

However, the Revenue Department ("the Respondent") rejected the ITC claim of the Petitioner solely on the ground that, the Petitioner has not claimed ITC in GSTR-3B returns vide Assessment Order dated September 30, 2023 ("the Impugned Order").

Aggrieved by the Impugned Order, the Petitioner filed a writ petition before the Hon'ble High Court. 

Issue

Whether Credit should be denied when ITC claim is not reflected in Form GSTR-3B return?

Held

The Hon'ble Madras High Court in the case of Writ Petition No. 3804 of 2024 held as under:

• Noted that, when the registered person contends that, he is eligible to claim ITC, by relying upon GSTR-2A and GSTR-9 returns, the Assessing Officer should examine whether the claim of ITC is valid by examining the required documents, further calling upon the registered person to provide the required documents. 
• Opined that, the entire claim of ITC was rejected by the Respondent on the ground that, GSTR-3B did not reflect the ITC claim. 
• Held that, the Impugned Orders are quashed and matter be remanded back for reconsideration.