Non-Reflection in GSTR-2A Insufficient for Denying Input Tax Credit

By Bimal Jain Goods and Services Tax Judiciary September 19, 2023 1 comment

TaxGuru Citation: 2023 taxguru.in 5939
Case Name: Diya Agencies Vs State Tax Officer (Kerala High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Kerala High Court

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Diya Agencies Vs State Tax Officer (Kerala High Court)

ITC cannot be denied to the recipient solely on the ground that transaction not reflected in GSTR-2A

The Hon’ble Kerala High Court in Diya Agencies v. The State Tax Officer [WP(C) No. 29769 of 2023 dated September 12, 2023] held that, if the taxpayer is able to prove that tax amount is paid to the seller and the Input Tax Credit claim is bonafide so the Input Tax Credit cannot be denied merely on non-reflection of transaction in GSTR-2A.

Facts:

M/s. Diya Agencies (“the Petitioner”) claimed the Input Tax Credit (ITC) of INR 44,51,943.08/- for year 2017-18.

The Revenue Department (“the Respondent”) denied the ITC claim of INR 1,04,376.05/- in respect to invoice not reflected in GSTR-2A.

Aggrieved by the order passed by the Adjudicating Authority the Petitioner filed a writ before the Hon’ble Kerala High Court.

The Petitioner relied upon the judgement of Suncraft Energy Private Limited and Another v. The Assistant Commissioner, State Tax [MAT 1218 of 2023 dated August 02, 2023] wherein the Hon’ble Calcutta High court held that, before reverting the ITC by the assessee, the Adjudicating Authority should take action against the selling dealer if it is found that he has not deposited the tax paid by the assessee. Unless the collusion between the assessee and the seller dealer is proved, the ITC is not to be denied if the assessee has genuinely paid the tax to the seller dealer.

The Petitioner contended that, it has fulfilled all the conditions stated under Section 16(2) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).

The Petitioner further contended that the Central Board of Indirect Tax and Customs (CBIC) had issued press release dated October 18, 2018 clarifying that Form GSTR-2A is the facility to view the details furnished by the supplier in GSTR-1 and cannot impact the ability of the recipient to avail ITC on self-assessment basis in consonance with the provisions of Section 16 of the CGST Act.

Issue:

Whether the taxpayer’s ITC can be denied solely based on ground that transaction not reflected in GSTR-2A?

Held:

The Hon’ble Kerala High Court in WP(C) No. 29769 of 2023 held as under: