InW.P. (C) No.29769 of 2023 -KER HC-Tax amount not reflected in GSTR-2A shouldn't be the sole ground to reject input tax credit claim, rules Kerala High Court
Justice Dinesh Kumar Singh [12-09-2023]

Read Order:Diya Agencies V. The State Tax Officer and Ors

Chahat Varma

New Delhi, September 27, 2023: The Kerala High Court has provided relief to Diya Agencies (petitioner), by ruling that input tax credit cannot be denied solely based on discrepancies in GSTR-2A.

The present writ petition was filed to challenge an assessment order, wherein, the petitioner's claim for input tax credit was denied on the ground that as per the GSTR 2A in respect of invoice supply, the tax payer was only eligible for input tax amount shown in CGSTR 2A. The petitioner argued that the denial of input tax credit should not be solely based on the amount mentioned in the GSTR 2A, as the petitioner had no control over this data. The petitioner emphasized that the assessing authority should conduct an independent examination of the petitioner's input tax credit claim, regardless of the figures provided in the GSTR 2A.

The single-judge bench of Justice Dinesh Kumar Singh reviewed the decision in Suncraft Energy Private Limited and Another v. The Assistant Commissioner, State Tax, Ballygunge Charge and Others [LQ/CalHC/2023/1773], where the Calcutta High Court had examined Section 16 of the Goods and Services Tax Act (GST Act) and press releases issued by the Central Board of Indirect Tax and Customs. In that case, the High Court had concluded that the non-performance or non-operability of Form GSTR-2A or other forms should not be a determining factor. It also ruled that before disallowing input tax credit, the assessing authority should take action against the selling dealer if it's found that the selling dealer had not deposited the tax paid by the assessee. Unless collusion between the assessee and the selling dealer is proven, input tax credit should not be denied if the assessee genuinely paid the tax to the selling dealer.

The bench held that upon examining the impugned assessment order, it was clear that the petitioner's claim for a higher input tax credit had been denied solely on the grounds that the amount was not mentioned in the GSTR 2A. It was stated that the responsibility for remitting the said amount, if not done by the seller dealer (supplier), should not fall on the petitioner. Whether the petitioner had indeed paid the tax amount and whether the transactions between the petitioner and the seller dealer were genuine are matters to be determined based on facts and evidence.

The bench emphasized that simply because the tax amount is not reflected in Form GSTR-2A should not serve as adequate grounds to reject the assessee's claim for input tax credit.

As a result, the court concluded that the assessment order, was not sustainable. The matter was remanded back to the Assessing Officer, allowing the petitioner an opportunity to assert their claim for input tax credit.