Praveen Bhaskaran Vs Union of India (Kerala High Court)
The Kerala High Court considered a writ petition by Praveen Bhaskaran, proprietor of M/s Galaxy Traders, challenging denial of input tax credit (ITC) of Rs.1,04,342, comprising CGST of Rs.52,171 and SGST of Rs.52,171, for the 2017-18 period. The assessing authority had denied the credit because the relevant supplies were not reported by the supplier in GSTR-1 and did not appear in the petitioner’s GSTR-2A. The Court examined the burden of proof under Section 155 of the GST law. The claimant must provide documentary evidence supporting the genuineness of the inward supplies and payment of tax. Non-reflection in GSTR-2A does not eliminate this burden, but the mismatch alone cannot substitute for examination of the taxpayer’s evidence.
The Court relied on its earlier decision in Diya Agencies v. State Tax Officer, which had considered the Supreme Court decisions in Union of India v. Bharti Airtel Ltd. and State of Karnataka v. Ecom Gill Coffee Trading Pvt. Ltd., as well as the Calcutta High Court decision in Suncraft Energy Pvt. Ltd. The relevant approach requires an opportunity for the taxpayer to establish the claim through supporting records. The Court held that the assessing authority must independently examine the evidence despite the discrepancy between GSTR-2A and GSTR-3B. Where the evidence establishes a bona fide and genuine claim, admissible credit should be granted. The Court did not itself determine that the petitioner had proved all conditions of ITC eligibility.
Consequently, the assessment order was set aside only to the extent of the denial of Rs.1,04,342 and the matter was remanded for fresh examination. The petitioner was directed to appear with relevant documents within fifteen days of 20 September 2023, and the assessing authority was directed to pass a fresh order expeditiously.
Cases Discussed
- Diya Agencies Vs State Tax Officer — Kerala High Court, WP(C) No. 29769/2023, 12 September 2023
- Union of India Vs Bharti Airtel Ltd. and Others — (2022) 4 SCC 328
- Suncraft Energy Private Limited and Another Vs Assistant Commissioner, State Tax, Ballygunge Charge and Others — Calcutta High Court, MAT 1218/2023
- State of Karnataka Vs Ecom Gill Coffee Trading Private Limited — 2023 (3) TMI 533 (SC)
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
Dated this the 20th day of September, 2023
1. The present writ petition has been filed under Article 226 of the Constitution of India impugning Ext.P5 assessment order, whereby the petitioner claims for Input Tax Credit to the extent of Rs.1,04,342/- ie.,CGST of Rs.52,171/- and same amount of SGST has been denied on the ground that the Input Tax Credit to such an extent claimed by the petitioner-assessee was not effected in Form GSTR-2A and the supply dealer has not mentioned the supplies involved in the petitioner-dealer in form GSTR -1.
2. Section 155 of the GST Act, 2017, takes care of such a situation wherein the fact that the assessee/dealer has taken inward supply, and the dealer has prepaid the admissible GST to the supplier-dealer and the supplier-dealer has not deposited the said tax amount to the Government, in such a situation the burden is on the person who claims the Input Tax Credit to prove his claim. The paid person in such a situation is required to furnish documentary evidence to prove that such tax has been paid by him. The assessing authority has denied the claim of the petitioner on the ground that the Input Tax Credit claimed by the petitioner was not reflected in GSTR-2A and he did not submit any proof of the payment of the GST to the Government. This Court by dealing with such a situation in the case of Diya Agencies v. The State Tax Officer in its judgment dated 12.09.2023 and after taking note of the judgment of the Supreme Court in the case of Union of India (UOI) v. Bharti Airtel Ltd and Others reported in [2022(4) SCC 328] and Suncraft Energy Private Limited and Another v. The Assistant Commissioner, State Tax, Ballygunge Charge and others [MAT 1218 of 2023] passed by the Calcutta High Court and the judgment of the Supreme Court in the case of The State of Karnataka v. M/s.Ecom Gill Coffee Trading Private Limited [2023 (3) TMI 533 SC] has held that the assessing officer is required to give an opportunity to the assessee in respect of his claim for Input Tax Credit, if there is difference between GSTR- 2A and GSTR-3B. If on examination of the evidence submitted by the assessee, the assessing officer is satisfied that the claim is bonafide and genuine, the assessee should be given the Input Tax Credit. Merely on the ground that in Form GSTR-2A the tax to an extent of Input Tax Credit being claimed by the petitioner is not reflected should not be a sufficient ground to deny the claim of the assessee for Input Tax Credit. The assessing authority is required to independently examine the evidence regarding the claim of the assessee for Input Tax Credit irrespective of the fact that tax is not reflected in Form GSTR-2A for which the assessee claims Input Tax Credit.
2. Considering the aforesaid facts of the case and the judgment in the case of Diya Agencies (supra), the impugned assessment order so far as the denial of Input Tax Credit to the petitioner to the extent of Rs.1,04,342/- is set aside. The case is remitted back to the file of the assessing authority to examine the evidence in possession of the petitioner as such irrespective of the difference in GSTR -2A and GSTR- 3B and on examination of the evidence, if the assessing authority is satisfied with the claim of the petitioner for Input Tax Credit to the extent of Rs.1,04,342/- which is denied by the Assessing Authority shall pass orders in accordance with law.
3. The petitioner is directed to appear before the assessing authority along with the judgment and all relevant documents/evidence in his possession within a period of fifteen days from today. The assessing authority will examine the evidence and pass a fresh order expeditiously.
4. With the aforesaid directions, this writ petition is finally disposed of.
