Judgement – Tax on credit notes issued taken in ITC in place of entering in GSTR-1

by Parveen Mahajan

Sr.No.0448
22-04-2024

2024-VIL-352-MAD
M/s OASYS CYBERNETICS PRIVATE LIMITED Vs STATE TAX OFFICER
Date of Order – 12-04-2024
HIGH COURT OF MADRAS

The petitioner’s case is that the amount of tax against sale return had been adjusted in ITC account. Such transactions has to be furnished in GSTR-1 were not done. Accordingly, such transactions were not auto populated in GSTR-2A. The mismatch was occurred between GSTR-3B and GSTR-2A in petitioner account.

The petitioner stated that the credit notes were erroneously reported as Input Tax Credit and that there was no revenue impact as a consequence. The CA certificate was also submitted in this respect.

The officer did not agree to plea of the petitioner. The demand was raised on the ground that no such invoice/credit note were reported in GSTR-1. The petitioner failed to rectify his mistake in the returns.

The case was remanded back for reconsideration

• On examining the above findings, I find that the explanation of the petitioner was not duly examined from the perspective of ascertaining whether the amount reflected as ITC tallies with the value of credit notes issued by the petitioner. If such exercise had been carried out, it would become clear as to whether there was revenue loss by way of excess availment of ITC. Since such exercise was not carried out and findings were recorded confirming the tax demand merely because credit notes were not duly reported in GSTR 1 or in the auto populated GSTR 2A, the impugned order calls for interference on this issue.
• It is unclear as to why the certificate was rejected because no reasons are discernible from the impugned order.