Fresh Opportunity of hearing be granted when guidelines prescribed in Circular relating to discrepancies in Form GSTR-3B and Form GSTR-2A for claiming of ITC has not been complied with

Last updated: 19 July 2024

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Quick Summary

The Karnataka High Court has overturned a revenue department order concerning discrepancies between GSTR-3B and GSTR-2A for Input Tax Credit (ITC) claims. The court found that the department failed to follow the procedures outlined in Circular No. 183/15/2022-GST. Consequently, the matter has been sent back for reconsideration, allowing the taxpayer an opportunity to be heard.

Court :
Karnataka High Court

Brief :
The Hon'ble Karnataka High Court in the case of R.S Marketing and Logistics Private Ltd. v. Commercial Tax Officer [W.P No. 7295 of 2024 dated June 05, 2024], set aside the adjudication order and remanded the matter back for reconsideration wherein the guidelines prescribed in Circular No. 183/15/2022-GST dated December 27, 2022("the Circular") relating to discrepancies in Form GSTR-3B and Form GSTR-2A for claiming of ITC has not been complied with.

Citation :
W.P No. 7295 of 2024 dated June 05, 2024

The Hon'ble Karnataka High Court in the case of R.S Marketing and Logistics Private Ltd. v. Commercial Tax Officer [W.P No. 7295 of 2024 dated June 05, 2024], set aside the adjudication order and remanded the matter back for reconsideration wherein the guidelines prescribed in Circular No. 183/15/2022-GST dated December 27, 2022("the Circular") relating to discrepancies in Form GSTR-3B and Form GSTR-2A for claiming of ITC has not been complied with.

Facts:

R.S Marketing and Logistics Private Limited ("the Petitioner"), filed a writ petition against an order dated May 2, 2023 ("the Impugned Order") passed by the Revenue department ("the Respondent") guidelines prescribed inthe Circular relating to discrepancies in Form GSTR-3B and Form GSTR-2A for claiming of ITC

Issue:

Whether the Petitioner entitled to an opportunity of hearing when the procedure prescribed in the Circular relating to discrepancy in Form GSTR-3B and Form GSTR-2A has not been complied with?

Held:

The Hon'ble Karnataka High court in W.P. No. 7295 of 2024 held as under:

Noted that, the Circular is made applicable specifically w.r.t. FY 2017-2018 and procedure has been prescribed in case where the ITC claimed is less than five lakh rupees.
Opined that, the procedure prescribed in the Circular has not been complied with by the Respondent.
Held that, the Impugned Order is set aside and remitted the matter back for reconsideration.

Judgment copy has been attached

FAQ :

The issue was whether the taxpayer was entitled to a hearing when the tax authorities did not follow the prescribed procedure regarding discrepancies between Form GSTR-3B and Form GSTR-2A for claiming Input Tax Credit (ITC).

Circular No. 183/15/2022-GST, dated December 27, 2022, which provides guidelines for discrepancies in Form GSTR-3B and Form GSTR-2A for claiming ITC.

The High Court set aside the adjudication order and remanded the matter back for reconsideration, stating that the procedure in the relevant circular was not complied with by the Respondent.

The circular noted in the judgement was specifically made applicable with respect to the Financial Year 2017-2018, and a procedure was prescribed for cases where the ITC claimed was less than five lakh rupees.

It means the original decision is cancelled, and the case will be reviewed again, likely with a fresh hearing for the taxpayer to present their case according to the proper procedures.