Fact of the Case-
The writ petition challenges proceedings under Section 74 of the U.P. GST/CGST Act for the financial year 2017-18; petitioner seeks quashing of the order dated 26.7.2023, citing a Circular No. 183/15/2022-GST dated December 27, 2022 regarding input tax availed, and requests remittance for a fresh decision considering the circular and other relevant materials in the case where the ITC was disallowed due to difference in Form GSTR-3B and Form GSTR-2A by entering wrong GSTIN number of the recipient in Form GSTR-1. The court, accepting the submission, sets aside the order and remits the matter for reconsideration by respondent no. 2 within one month.
Held that-
The legal matter was presented before the court with Sri Aditya Pandey, learned counsel for the petitioner, and Sri Ankur Agarwal, learned counsel for the respondent, representing the Revenue.
The focus of this writ petition is on the actions initiated under Section 74 of the U.P. GST/CGST Act by respondent no. 2. This followed a notice dated 24.12.2022 for the financial year 2017-18, corresponding to the tax period of July 2017 to March 2018. The petitioner seeks to challenge the proceedings and requests the quashing of the order dated 26.7.2023 passed under Section 74 for the same financial year.
The petitioner's counsel highlighted a Circular No. 183/15/2022-GST dated December 27, 2022 concerning input tax availed through GSTR-3B. Referring to paragraph 3(d) of the circular, it was emphasized that if a supplier files Form GSTR-1 and GSTR-3B but declares the supply with the wrong GSTIN of the recipient in GSTR-1, certain procedures outlined in paragraph 4 of the circular should be followed. The petitioner insists that these procedures were not adhered to in their case.
The petitioner's counsel argues that while the impugned order mentions the circular, its benefits were not extended to the petitioner. The request is made to set aside the order and remit the matter to the concerned authority for a fresh decision.
Sri Ankur Agarwal, representing the Revenue, expresses no objection to the petitioner's proposition and agrees to the matter being sent back to the authority for a fresh decision.
Acknowledging the fair statement from Sri Ankur Agarwal, the court sets aside the impugned order dated 26.7.2023. The case is remitted back to respondent no.2, with directions to pass fresh orders within one month, considering the circular and any other supporting material presented by the petitioner.
Circular No. 183/15/2022-GST paragraph 3(d)-
Where the supplier has filed FORM GSTR-1 as well as return in FORM GSTR-3B for a tax period, but he has declared the supply with wrong GSTIN of the recipient in FORM GSTR-1?
--In such cases, the difference in ITC claimed by the registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided in para 4 below. In addition, the proper officer of the actual recipient shall intimate the concerned jurisdictional tax authority of the registered person, whose GSTIN has been mentioned wrongly, that ITC on those transactions is required to be disallowed, if claimed by such recipients in their FORM GSTR-3B. However, allowance of ITC to the actual recipient shall not depend on the completion of the action by the tax authority of such registered person, whose GSTIN has been mentioned wrongly, and such action will be pursued as an independent action.
Circular No. 183/15/2022-GST paragraph 4-
The proper officer shall first seek the details from the registered person regarding all the invoices on which ITC has been availed by the registered person in his FORM GSTR 3B but which are not reflecting in his FORM GSTR 2A. He shall then ascertain fulfillment of the following conditions of Section 16 of CGST Act in respect of the input tax credit availed on such invoices by the said registered person:
i) that he is in possession of a tax invoice or debit note issued by the supplier or such other tax paying documents;
ii) that he has received the goods or services or both;
iii) that he has made payment for the amount towards the value of supply, along with tax payable thereon, to the supplier.
Besides, the proper officer shall also check whether any reversal of input tax credit is required to be made in accordance with section 17 or section 18 of CGST Act and also whether the said input tax credit has been availed within the time period specified under sub-section (4) of section 16 of CGST Act.
Shree Krishna Traders Versus State of U.P. and Another (ALLAHABAD HIGH COURT)
Team Taxonation
Comment: