HC Remands GST Demand Based on GSTR-2A Mismatch Subject to Additional Pre-Deposit

HC Remands GST Demand Based on GSTR-2A Mismatch Subject to Additional Pre-Deposit

The petitioner, Tvl. Sri Shivashakthi Engineering Works, challenged a GST demand confirmed for the tax period April 2018 to March 2019 through an order dated 29.04.2024. The demand arose on account of a mismatch between Form GSTR-2A and Form GSTR-3B, leading to the denial of Input Tax Credit. The petitioner’s rectification application filed under Section 161 was rejected, and the statutory appeal filed thereafter was also dismissed by the appellate authority.

The petitioner contended that the mismatch occurred due to an error in Form GSTR-1 filed by the supplier and Importers, who wrongly reflected the transaction as B2C instead of B2B.

Main Issue: Whether denial of Input Tax Credit solely on account of GSTR-2A mismatch was justified when tax had been paid by the supplier and supporting certification was available.

HC Ordered: The High Court set aside the impugned order and remanded the matter for fresh adjudication. Taking note of Circular No.183/15/2022 dated 27.12.2022 and the Chartered Accountant’s certificate produced by the petitioner, the Court held that the issue required reconsideration on merits. The remand was made conditional upon the petitioner depositing an additional 10% of the disputed tax over and above the amount already deposited at the time of filing the appeal.

The Court directed the adjudicating authority to pass a fresh order after granting due opportunity to the petitioner, preferably within three months. It was clarified that failure to comply with the pre-deposit condition would permit the department to proceed with recovery as if the writ petition had been dismissed.

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