2026-VIL-241-GSTAT-LCK
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  2. 2026-VIL-241-GSTAT-LCK

SGST Tribunal

GST - Excess Input Tax Credit alleged on comparison of GSTR-3B with GSTR-2A without determining net Input Tax Credit position – ex parte order confirmed the demand, which was upheld ex parte by the FAA owing to non-appearance - Appellant contended that the Input Tax Credit reversals already made in GSTR-3B were ignored and that the Department's own figures showed lower availment under CGST and SGST heads - Whether the demand of excess Input Tax Credit can be raised merely by matching GSTR-3B with GSTR-2A, without considering reversals made in the returns - HELD - The law does not permit the Revenue to look at return figures in isolation. Once an amount has been accounted for or adjusted through reversal of Input Tax Credit within the statutory returns, a duplicate demand cannot be raised without giving credit for such reversal. The adjudicating authority must determine the net credit position and evaluate whether any actual revenue loss has occurred - The Table in GSTR-3B showed substantial Input Tax Credit reversed; the lower authorities failed to examine whether the alleged excess claim was already neutralised by such reversals. The demand suffers from patent factual and legal error and total lack of verification - The orders of both the lower authorities are set aside and the matter is remanded to the Proper Officer for fresh adjudication after verification – The appeal is allowed by remand - Demand based on difference between tax figures in Table 9 of GSTR-9 and Table 9P of GSTR-9C - Appellant contended that the difference was not unpaid tax since one field reflected tax paid through returns including the effect of Input Tax Credit reversal while the other reflected tax payable on outward supplies, and that this explanation was disclosed in Table 10 of GSTR-9C - Revenue treated the variance as an unreconciled shortfall in output tax as the Appellant gave no explanation before the lower authorities - Whether a tax demand can be confirmed merely on a mismatch between the two statutory returns - HELD - The Proper Officer failed to scrutinise the flow of entries and treated a balancing reconciliation figure as short-paid tax. Determination of tax liability requires independent verification of sales ledgers, tax invoices and financial books rather than a simplistic comparison of two fields on the portal, and confirming a demand purely on system-generated discrepancies without one-to-one financial reconciliation violates the spirit of law and fairness. Thorough re-verification by the Proper Officer is essential - The impugned orders are set aside and the matter is remanded for de novo adjudication - Alleged short reversal of Input Tax Credit under Rules 42 and 43 of the CGST Rules, 2017 - Revenue alleged short reversal of Input Tax Credit attributable to exempt supplies, while the Appellant demonstrated by documentary records that the reversal shown in GSTR-9 and in Table 4(B) of GSTR-3B was substantially higher than the amount alleged to be short-reversed - Whether the demand under Rules 42 and 43 raised by treating the entire Input Tax Credit as common credit is sustainable - HELD - The Department raised the demand by treating the entire Input Tax Credit as common credit, discarding the mandatory requirement of identifying and segregating the actual common credit from specific credit. A valid determination under Rules 42 and 43 cannot be made without first segregating specific credit from common credit and then mapping the ratio of exempt to taxable turnover against the common input tax pool, and this statutory exercise was entirely omitted. The reversals already made were also not reconciled - The demand was raised without proper verification and suffers from non-application of mind, the impugned orders are set aside and the appeal is allowed by way of remand for fresh verification.
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