ITC claimed in GSTR-9 can be used to offset GST demand: Calcutta HC

The Calcutta High Court quashed the Appellate Authority’s order because it failed to clearly explain why it rejected the taxpayer’s ITC claim.

The petitioner, Laxmi Ghosh, forgot to claim the Input Tax Credit (ITC) for the IGST related to the months of May 2018, June 2018 and July 2018 while filing the GSTR-3B. On realising her mistake, she claimed the ITC while filing GSTR-9 for the year 2018-19. This resulted in the issuance of a show cause notice demanding CGST of Rs 2,19,033.03, an equal amount of SGST and interest for the period April 2018 to March 2019.

The petitioner in the reply submitted that the ITC for IGST, which she forgot to claim in GSTR-3B, should be offset against the tax demand for CGST and SGST, and after adjusting this ITC, she should only pay Rs 83,608.07. But the Appellate Authority rejected her plea, calling it devoid of logic, facts & proper explanation. It claimed that the necessary documents and the petitioner’s representation were missing.

The bench led by Justice Om Narayan Rai, noted that the appellate authority did not explain why the petitioner’s plea was devoid of logic, facts & proper explanation and what required documents were missing. Further, the Court found that the petitioner had submitted a written submission before the appellate authority; the claim that the petitioner did not submit a representation was false.

Additionally, the appellate authority failed to explain why the ITC claimed in GSTR-9 cannot be used to offset the tax demand. The court cited the decision in the case of Pioneer Co-operative Car Parking Servicing and Constructions Society Ltd. Vs State of West Bengal, where it was held that the authorities must consider details filed in GSTR-9 instead of rejecting them just because they were not reflected in GSTR-3B.

Based on these findings, the Calcutta High Court set aside the order passed by the Appellate Authority and the matter was remanded for fresh consideration.