Fresh Opportunity of Hearing Granted for Non-Compliance with Circular Guidelines on ITC Discrepancies

By: Admin Date: July 17, 2024 Categories: Important Pronouncements

The Karnataka High Court, in the case of R.S Marketing and Logistics Private Ltd. v. Commercial Tax Officer [W.P No. 7295 of 2024 dated June 05, 2024], has set aside an adjudication order and remanded the matter for reconsideration due to non-compliance with guidelines prescribed in Circular No. 183/15/2022-GST dated December 27, 2022. This Circular pertains to discrepancies between Form GSTR-3B and Form GSTR-2A for claiming Input Tax Credit (ITC).

Facts:

R.S Marketing and Logistics Private Limited (“the Petitioner”) challenged an order dated May 2, 2023 (“the Impugned Order”) issued by the Revenue department (“the Respondent”). The Impugned Order allegedly did not adhere to the guidelines in the Circular regarding discrepancies in Form GSTR-3B and Form GSTR-2A for claiming ITC.

Issue:

The primary issue was whether the Petitioner was entitled to a fresh opportunity of hearing due to the Respondent’s failure to comply with the Circular’s prescribed procedure.

Held:

The Karnataka High Court held as follows:

  • The Circular specifically applies to discrepancies for FY 2017-2018, particularly where the ITC claimed is less than five lakh rupees.
  • The Respondent did not comply with the procedure prescribed in the Circular.
  • The Court set aside the Impugned Order and remitted the matter for reconsideration.

This ruling emphasizes the importance of adhering to procedural guidelines in Circulars, ensuring that taxpayers are afforded a fair opportunity to address discrepancies in ITC claims.Here are some hashtags you can use for this topic:

ITCDiscrepancies KarnatakaHighCourt GSTGuidelines TaxCompliance GSTR3B GSTR2A InputTaxCredit TaxLaw LegalUpdate GSTNews

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