Peekay Industries Vs Commissioner of Commercial Taxes (GSTAT Bengaluru)
Summary: The GSTAT considered an appeal by M/s. Peekay Industries concerning alleged excess Input Tax Credit for April 2019 to March 2020 arising from differences between FORM GSTR-3B and FORM GSTR-2A. The proceedings initially identified an alleged excess of Rs. 82,701/- under IGST, while the primary reconciliation showed shortfalls of Rs. 1,745/- each under CGST and SGST. Despite this, the adjudication order ultimately confirmed tax of Rs. 25,587/- each under CGST and SGST, together with interest and penalty, based on a separate “Excess of 2018-19 claimed in 2019-20” / “Net Excess Claim” working.
The Tribunal found that the authorities had not adequately explained the shift from the IGST discrepancy to the CGST/SGST demand, had not properly considered the Appellant’s reconciliation, and had attributed CGST/SGST figures to the Appellant’s reply even though the recorded letter dated 30.03.2024 dealt only with the IGST head. The Tribunal examined Section 16 of the CGST Act, including Section 16(2)(c), Section 16(2)(aa), Rule 36(4), Section 73 and Section 75.
It held that a GSTR-2A/GSTR-3B difference may justify verification but cannot, on the facts before it, by itself conclusively establish wrongful availment of ITC. It also held that Circular No. 183/15/2022-GST and Circular No. 193/05/2023-GST required period-specific application, particularly because Rule 36(4) operated from 09.10.2019. The Tribunal further found deficiencies in the reasoned decision-making process and held that the tax, interest and penalty could not be sustained on the existing record.
