GMA Pinnacle Automotives Pvt. Ltd. vs State Tax Officer, Kerala

The assessment of the petitioner under the Goods and Services Tax (GST) Act for the period covering July 2017 to March 2018 resulted in a determination as per Ext.P1 order, which denied the petitioner’s claim for Input Tax Credit amounting to Rs.5,10,808.68/-. The petitioner’s counsel has brought to light that, in accordance with Ext.P2 circular dated 27.12.2022, when there is a discrepancy between the GSTR 2A and GSTR 3B, the assessing officer is required to request the petitioner to produce a certificate from the concerned supplier. This certificate should verify that the supplies were indeed made by the supplier and that the tax on such supplies was duly paid by the supplier in their GSTR 3B return. The counsel argues that despite this procedural mandate, the assessing officer did not ask the petitioner to provide such documentation, which is crucial for verifying the authenticity of the Input Tax Credit claim. In an effort to comply with the circular’s requirements, the petitioner proactively sent an email dated 15.12.2023, expressing their readiness to produce the necessary documents before the Assessing Authority. Despite this, the assessment order under Ext.P1 rejected the petitioner’s claim for Input Tax Credit without considering the documents that the petitioner was willing to submit.

The learned Government Pleader has contended that all documents provided by the petitioner were indeed considered during the assessment as indicated in Ext.P1. However, when questioned by the Court about whether the petitioner had been formally requested to explain the mismatch between the GSTR 3B of the supplier and the GSTR 2A filed by the petitioner, it was revealed that Ext.P1 does not contain any reference to a request for such an explanation. This lack of documentation or communication raises significant concerns regarding whether the assessment process fully adhered to procedural requirements and whether the petitioner was afforded a fair opportunity to present their case. The absence of a formal request for explanation or documentation, as mandated by the circular, suggests that the petitioner’s right to a fair and transparent assessment process may have been compromised. As such, the failure to follow the procedural requirements stipulated in Ext.P2 and the rejection of the petitioner’s claim without due consideration of the submitted willingness to provide necessary documents highlight potential procedural lapses that could impact the fairness and accuracy of the assessment outcome.

After considering the arguments presented by both the learned counsel for the petitioner and the learned Government Pleader, and taking into account the provisions outlined in Ext.P2 circular, I have concluded that the portion of Ext.P1 assessment order denying Input Tax Credit of Rs.5,10,808.68 due to the purported mismatch between GSTR 2A and GSTR 3B of the supplier must be set aside. However, it is important to clarify that while Ext.P1 is being modified in this regard, other determinations made in Ext.P1 that are not related to the denial of Input Tax Credit will remain unaffected and continue to be in force. Therefore, this writ petition is resolved with the direction that the petitioner may file an application for rectification of Ext.P1 specifically concerning the denial of Input Tax Credit amounting to Rs.5,10,808.68. This application should be accompanied by all relevant documents supporting the claim for Input Tax Credit. Upon receipt of such an application, the respondent is required to review it and issue a decision in accordance with the relevant legal provisions, ensuring that the petitioner is provided with a fair opportunity for a hearing. This process will ensure that the petitioner’s claim for Input Tax Credit is adjudicated properly and in line with the stipulated legal and procedural guidelines.

Download PDF:
GMA Pinnacle Automotives Pvt. Ltd.

For reference visit:
Kerala High Court 

Read another case law:
GST Case Law