M/s.Sri Shanmuga Hardwares Electricals vs. The State Tax Officer [W.P.Nos.3804, 3808 & 3813 of 2024].
The petitioner, a trader in electrical products and hardware, claims that the nil returns filed in the GSTR-3B returns were mistakenly and unintentionally filed. As a result, the petitioner asserts their eligibility for Input Tax Credit (ITC) in all the mentioned assessment periods, which is accurately reflected in the GSTR-2A returns. Furthermore, the petitioner states that they have duly filed the GSTR-9 (annual) returns, which accurately reflect their ITC claims. The issuance of the impugned orders is contested due to the rejection of these claims.
The petitioner’s counsel drew attention to the challenged orders and emphasized that the petitioner had responded to the show cause notice, stating that the eligible Input Tax Credit (ITC) in each assessment period was higher than the tax liability. By analyzing the relevant section of the challenged orders, the counsel argued that the rejection of the ITC claim was solely based on the petitioner’s failure to claim ITC in the GSTR-3B returns.
Mr.T.N.C.Kaushik, learned Additional Government Pleader acknowledges receipt of the notice for the respondent. Initially, he argues that the petitioner should have utilized the legal remedy instead of directly coming to this Court. He also contends that the responsibility of proving Input Tax Credit (ITC) eligibility lies with the registered individual. As the petitioner failed to fulfill this burden of proof, he asserts that there is no need to challenge the orders in question.
The petitioner’s ITC claim and their argument that the claim exceeds the tax liability are mentioned in every challenged order. However, in each order’s operative portion, the claim is dismissed solely because the petitioner did not claim ITC in the GSTR-3B returns. To provide an example, the operative portion of the order for the assessment year 2017-2018 is presented below:
“The reply filed by the registered person were verified and not accepted. Hence, tax is payable along with interest and penalty under Section 74 of the CGST Act 2017. The above tax due to Rs.7,77,262/- along with interest due of Rs.7,51,262/- (approximately calculated up to 31.05.2023) has to be paid as the tax payer has not claimed any eligible ITC in GSTR 3B returns filed.”
Upon the registered individual’s assertion of eligibility for ITC based on GSTR-2A and GSTR-9 returns, it is imperative for the assessing officer to thoroughly scrutinize the validity of the claim by reviewing all pertinent documentation, and if necessary, requesting the registered person to furnish such documents. The rejection of the claim solely due to discrepancies in the GSTR-3B returns indicates a need for intervention in the decisions being challenged in this case.
The orders contested above have been nullified, and these cases are sent back for review. The petitioner is allowed to present all relevant documents regarding its ITC claims to the assessing officer within a maximum of two weeks from receiving a copy of this decision. Upon receipt, the respondent is directed to provide the petitioner with a fair opportunity, including a personal meeting, and then promptly issue new assessment orders
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