2026-VIL-615-MAD
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SGST High Court Cases

GST – Scope of expression “wrongful availment and utilisation of Input Tax Credit” - Mismatch between GSTR-3B and GSTR-2A, Interest liability on wrongfully availed ITC – Demand of interest on the ground of discrepancy between the Input Tax Credit reflected in the GSTR-3B and the auto-populated GSTR-2A return. The petitioner discharged the resulting tax liability by debiting the electronic credit ledger - Whether a liability arising out of mismatch in GSTR-3B and GSTR-2A returns constitutes wrongful availment and utilisation of Input Tax Credit attracting the higher rate of interest prescribed under Section 50(3) of the Act, or whether interest is payable only on tax paid by debiting the Electronic Cash Ledger as prescribed under the proviso to Section 50(1) – HELD - In the absence of any statutory definition curtailing the scope of the expression “wrongful availment and utilisation of ITC” to fraudulent or bad faith availment or utilisation, any availment and utilisation of ITC while not eligible or entitled thereto would qualify as wrongful availment and utilisation. The liability arising from the discrepancy in Input Tax Credit between GSTR - 3B and GSTR - 2A constitutes wrongful availment and utilisation of Input Tax Credit, and therefore the higher interest rate prescribed under Section 50(3) is applicable - Any availment and utilisation of Input Tax Credit while not eligible or entitled thereto qualifies as wrongful availment and utilisation. This interpretation is reinforced by the fact that bad faith availment is separately dealt with under Section 74 with higher penalties, indicating that wrongful availment under Section 50(3) has a broader scope. The proviso to Section 50(1) pertains only to belated payment of tax by debiting the Electronic Cash Ledger and does not apply to cases of wrongful availment where utilisation occurs through debiting the Electronic Credit Ledger. The Rule 88B(3) specifically prescribes the methodology for calculating interest in cases of wrongful availment, calculating such interest from the date of utilisation until reversal. The assessing officer correctly applied Section 50(3) in computing the interest liability, and no infirmity is found warranting interference - The writ petition is dismissed
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