Tvl. Hansraj and Company Chennai vs Assistant Commissioner, (ST), Mannady Assessment Circle, Chennai

The petitioner is challenging an assessment order dated 25.08.2023 that disallowed Input Tax Credit (ITC) claimed by the petitioner. The disallowance was based on the assertion that the details provided in the petitioner’s return did not match those in the GSTR-2A return.

The petitioner is a registered entity under the relevant GST laws and received a show cause notice on 27.01.2023, alleging an excess claim of ITC. This allegation stemmed from a comparison between the petitioner’s GSTR-3B return and the GSTR-2A return. In response, on 01.08.2023, the petitioner explained that the pertinent invoice was issued by their supplier, M/s.Kirthi Enterprises, but mistakenly featured the GSTIN of the petitioner’s sister concern, Premier Corporations. Despite the explanation, the authorities disregarded the response and proceeded to confirm the proposal to impose tax, interest, and penalty, prompting the petitioner to file this writ petition.

The petitioner’s counsel argues that invoice no.123 dated 20.09.2017, issued by Kirthi Enterprises, supports their claim. By referencing Kirthi Enterprises’ GSTR-1 return, it was revealed that invoice no.123 was incorrectly listed as being issued to Premier Corporation. Given that the ITC was legitimately based on a purchase made by the petitioner from Kirthi Enterprises, the counsel contends that the assessment order in question requires intervention.

In essence, the petitioner asserts that despite a genuine purchase transaction, the discrepancy arose due to an error in the supplier’s documentation. Therefore, they argue that the disallowance of ITC is unjustified and seek relief from the court.

In the legal proceedings of W.P.No.4523 of 2024, Mr. T.N.C. Kaushik, the learned Additional Government Pleader, represented the respondents and accepted notice on their behalf. He argued that if the petitioner was aggrieved by the purported error in the return filed by the supplier, rectification proceedings should be pursued. However, upon examining the documents on record, including an invoice dated 20.09.2017 and the GSTR return of Kirthi Enterprises, it was prima facie evident that the GSTIN of Premier Corporation was inaccurately stated by Kirthi Enterprises. This error could result in the petitioner being unjustly deprived of Input Tax Credit (ITC). Therefore, the impugned order dated 25.08.2023 was deemed inappropriate, warranting interference.

As a result, the court quashed the impugned order and remanded the matter to the assessing officer for fresh assessment. The assessing officer was directed to afford the petitioner a reasonable opportunity, including a personal hearing, and issue a new assessment order within two months. Additionally, the petitioner was given the option to file an appropriate petition if necessary to rectify the error complained of.

Consequently, W.P.No.4523 of 2024 was disposed of with no costs imposed, and W.M.P.Nos.4896 and 4898 of 2024 were closed accordingly.

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Tvl.Hansraj and Company

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