2026-VIL-70-GSTAT-BLR
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  2. 2026-VIL-70-GSTAT-BLR

SGST Tribunal

GST - Denial of Input Tax Credit on account of GSTR-3B and GSTR-2A Mismatch - Reliance on mismatch without Invoice-Wise Verification - Appellant claimed Input Tax Credit pertaining to prior financial year invoices in the subsequent financial year. Revenue alleged excess Input Tax Credit based on mismatch between FORM GSTR-3B and FORM GSTR-2A without examining the Appellant's contention that the difference arose because credit pertaining to prior financial year was availed within the time permitted under Section 16(4) of the CGST Act, 2017 - Whether the difference between credit claimed in FORM GSTR-3B and credit reflected in FORM GSTR-2A can be treated as inadmissible excess without invoice-wise verification – HELD - The statutory provision Section 16(4) as it stood for the transition period permitted a taxpayer to claim credit on prior year invoices up to the due date of the subsequent year return. FORM GSTR-2A was at the relevant time a facilitation tool and not a statutory bar to credit. The Circular No. 183/15/2022-GST specifically directs the Proper Officer to verify, not summarily disallow, cases where prior year credit has been claimed in subsequent year returns - The finding that non-appearance of an invoice in FORM GSTR-2A shows that the supplier did not pay tax is an assumption, not a finding reached after verification. The three precedents relied upon by the First Appellate Authority namely Mahalakshmi Cotton Ginning Processing and Oil Industries v. State of Maharashtra, ALD Automotive Private Limited v. CTO, and Microqual Techno Ltd. v. State of Karnataka rest on facts and statutory provisions materially different from the present case and could not have been relied upon to disallow the credit - The demand cannot be sustained as it stands without invoice-wise verification of the prior year credit - The demand for excess credit raised is not sustainable without proper invoice-wise verification and reconciliation. The matter is remanded to the Proper Officer for de novo adjudication with directions to carry out invoice-wise verification with reference to prior year records - The appeal is allowed by way of remand - Violation of Natural Justice - Mandatory personal hearing - Section 75(4) - Absence of personal hearing before confirmation of demand - The Show Cause Notice issued under Section 73 recorded the date, time and venue of personal hearing as NA and no personal hearing was granted to the Appellant before the Order-in-Original was passed confirming the entire demand - Whether the absence of a personal hearing before confirmation of demand under Section 73(9) vitiates the Order-in-Original – HELD - The Section 75(4) makes a hearing mandatory once an adverse decision is contemplated against the person, irrespective of whether a specific request for hearing was made. The absence of any such hearing before the Order-in-Original was passed is a clear infirmity - The Show Cause Notice itself records the date, time and venue of personal hearing as NA and nothing on the record shows that any hearing was in fact granted before the demand was confirmed. The absence of a personal hearing, by itself, justifies setting aside the Order-in-Original – The Appellant shall be granted a proper opportunity of personal hearing, with the date, time and venue duly communicated, and shall be permitted to produce its books of account, invoices and any further reconciliation statements, before any fresh order is passed. The issue is answered in favour of assessee - Notice under Section 61 / Form GST ASMT-10 - Scrutiny of returns - Independent provisions Section 61 and Section 73 - Absence of notice in FORM GST ASMT-10 - The Proper Officer initiated proceedings under Section 73 read with Rule 142 following an audit assignment, not pursuant to scrutiny under Section 61 - Whether the absence of a notice in FORM GST ASMT-10 under Section 61 renders proceedings initiated directly under Section 73 invalid – HELD - Section 61 and Section 73 are independent provisions. Section 61 provides one particular route for scrutiny of returns which requires a notice in FORM GST ASMT-10. Where the Proper Officer proceeds directly under Section 73 read with Rule 142 without first invoking Section 61, the absence of a FORM GST ASMT-10 notice does not, by itself, invalidate the proceedings. The present proceedings were initiated pursuant to a specific assignment under Section 73 read with Rule 142 following an audit reference, and not pursuant to scrutiny under Section 61. The decisions relied upon by the Appellant on this point are distinguishable on facts and do not invalidate the proceedings under Section 73. However, this ground does not cure the infirmities found on the prior issues which go to the root of the impugned orders.
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