GSTAT Allows ITC of Previous Financial Year to Be Claimed in April 2019 :

Neelima Goenka is a registered taxpayer carrying on business under the name M/s Shri Krishna Enterprises, claimed ITC of Rs. 1,62,818.76 in her GSTR-3B return for April 2019. However, the credit reflected in her GSTR-2A for that month was only Rs. 25,056, resulting in an alleged mismatch of approximately Rs. 1,37,762. The Proper Officer issued a notice under Section 73 of the CGST and SGST Act, 2017, and subsequently passed an order dated 22 December 2020, demanding tax along with interest and penalty, aggregating to Rs. 1,92,865.92. The demand was based on the alleged excess availment and utilisation of ITC.

The appellant challenged the order before the first appellate authority. However, her appeal was dismissed ex parte on 11 July 2022 on the ground that she had not appeared for the hearing. Aggrieved by the decision, she approached the GST Appellate Tribunal, contending that the credit related to genuine inward supplies received during FY 2018-19 and had been claimed within the time prescribed under the law.

The Tribunal found that the ITC claimed by the appellant in April 2019 related to genuine purchases and inward supplies made during FY 2018-19, which had inadvertently remained unclaimed in the corresponding returns. Since the credit was claimed within the applicable statutory time limit, the Tribunal held that the appellant was legally entitled to avail the credit under Sections 16(4) and 39(9) of the Act.

The Tribunal further observed that the notices had been uploaded under the “Additional Notices & Orders” tab of the GST portal instead of the primary “Notices & Orders” tab. It held that this manner of communication deprived the appellant of a meaningful opportunity to participate in the proceedings. The adjudicating authority had also failed to provide a personal hearing despite contemplating an adverse decision, in violation of Section 75(4) of the Act.

The Tribunal additionally found that the appellate authority had dismissed the first appeal without examining the grounds raised or the supporting documents, contrary to Section 107(12), which requires an appellate order to record the points for determination, decisions and reasons. Accordingly, both the original demand order dated 22 December 2020 and the appellate order dated 11 July 2022 were set aside. The demand was struck off, and any amount deposited pursuant to the impugned proceedings was directed to be refunded in accordance with law, subject to verification of payment and statutory requirements.

Accordingly, the GSTAT allowed the appeal, set aside the Order-in-Original dated 22 December 2020 and the Order-in-Appeal dated 11 July 2022, and struck off the demand of Rs. 1,92,866.