Ganges International Pvt. Ltd. Vs Assistant Commissioner of Tax (Karnataka High Court)
In Ganges International Pvt Ltd vs Assistant Commissioner of Tax Karnataka High Court, the petitioner challenged an order-in-original dated 10.12.2025, wherein the tax authorities raised a demand alleging ineligible availment of Input Tax Credit (ITC). The demand was based on discrepancies such as excess ITC claimed, ITC on invoices issued by non-existing suppliers, non-payment of GST under the Reverse Charge Mechanism (RCM), and excess ITC related to RCM entries.
The petitioner contended that in cases involving mismatch between ITC declared in Form GSTR-3B and Form GSTR-2A, the assessing authority was required to follow the procedure prescribed under Circular No. 183/15/2022-GST dated 27.12.2022. It was argued that the prescribed reconciliation mechanism under the circular had not been followed, rendering the adjudication defective. Additional contentions included that action for wrongful ITC should not have been initiated without corresponding action against suppliers.
The Court noted that the contention regarding non-following of the prescribed procedure was not controverted. Considering this, and the detailed findings in the impugned order regarding alleged wrongful ITC availment, the Court held that the matter required reconsideration. Accordingly, the impugned order and consequential demand were set aside. The matter was remitted to the assessing authority for fresh adjudication from the stage of reply to the show cause notice, with a direction to permit reconciliation in accordance with the prescribed circular. All contentions were kept open, and the petitioner was directed to appear before the authority on 21.04.2026.
