Case Law Details
Vijayshanthi Hardware Vs Assistant Commissioner (ST)(FAC) (Madras High Court)
Section 16 of The Central Goods And Services Tax Act, 2017 delves into Input Tax Credit (ITC) and its eligibility criteria along with conditions for claiming the credit. A recent judgment by the Madras High Court sheds light on the implications of wrongly availing ITC and subsequent reversals, emphasizing the importance of compliance.
The petitioner’s case revolves around the purchase of a car in the assessment year 2021-2022 and the erroneous availing of Input Tax Credit in relation to it. Despite reversing the ITC in the GSTR 3B return, an order dated 11.07.2023 was issued, prompting the petitioner to challenge it.
The petitioner’s counsel highlighted the reversal of Rs. 73,690 each towards CGST and SGST in the GSTR 3B return, along with a further debit of Rs. 71,706 from the petitioner’s electronic credit ledger post the impugned order.
Acknowledging the petitioner’s submission, the court observed discrepancies between the impugned order and the documented reversal of ITC. Consequently, the court quashed the order and remanded the matter for reconsideration. The petitioner was granted an opportunity to respond to the show-cause notice dated 19.04.2023 and submit relevant documents within two weeks.
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