R.S. Marketing And Logistics Private Limited Vs Commercial Tax Officer (Karnataka High Court)
The petitioner challenged an adjudication order dated 02.05.2023, issued on the ground that discrepancies existed between ITC claimed in GSTR-3B and GSTR-2A. The petitioner contended that adequate opportunity to explain the mismatch was not provided and that the authority failed to follow the procedure prescribed in Circular No. 183/15/2022-GST dated 27.12.2022, which applies to FY 2017-18 and prescribes specific steps where ITC differences are below ₹5,00,000. The Revenue argued that sufficient opportunity had been granted and that the circular was not relied upon during adjudication.
The Court noted that the adjudication order showed discrepancies between ITC reflected in GSTR-3B and GSTR-2A and that the authority had rejected the claim solely on this basis. It observed that the circular expressly applies to FYs 2017-18 and 2018-19 and mandates the procedure to be followed for pending adjudications. Therefore, the authority was required to consider the circular regardless of whether the petitioner had cited it.
The Court held that the circular was applicable to the case and set aside the adjudication order, remanding the matter for fresh consideration in accordance with the circular and the Court’s observations. The Court also accepted the petitioner’s request for an additional opportunity to present its case. As a condition for remand, the petitioner was directed to make an additional deposit of 10% of the tax determined in the original adjudication order. The writ petition was accordingly disposed of.
