Kerala High Court rules that ITC cannot be denied solely due to GSTR-2A and GSTR-3B mismatch, AO must reconsider ITC claim with full supporting documents.
Saloni Kumari | Sep 27, 2025 |
Kerala HC Upholds Taxpayer Rights: ITC Cannot Be Denied Solely on GSTR-2A and GSTR-3B Mismatch
Mina Bazar, located near Railway Station Road, Payyanur, Kannur (petitioner), has filed a writ petition in Kerala High Court against the State Tax Officer-1, State Goods and Service Tax Department; Deputy Commissioner (Arrear Recovery), Office of Joint Commissioner, Union of India; Central Board of Indirect Taxes & Custom GST Policy Wing; and State of Kerala (respondents) before the bench comprising of Honourable Mr. Justice Dinesh Kumar Singh.
The petitioner challenged two impugned Ext.P1 assessment orders and Ext.P2 recovery notices dated 20.08.2022 and 24.07.2023, respectively. The dispute in this case was that the tax authorities disallowed the petitioner’s ITC claim, merely based on a discrepancy between GSTR-2A and GSTR-3B. The authorities claimed that since certain entries were not found in GSTR-2A, the petitioner could not claim ITC in GSTR-3B.
When the High Court analysed the case, it cited earlier judgments on similar matters: this court in Diya Agencies Vs. The State Tax Officer, the Supreme Court’s ruling in State of Karnataka v. Ecom Gill Coffee Trading Pvt Ltd, and the Calcutta High Court’s ruling in Suncraft Energy Pvt Ltd Vs.Assistant Commissioner, State Tax. All these rulings concluded that the Input Tax Credit (ITC) cannot be denied solely based on a discrepancy between GSTR-2A and GSTR-3B.
The court said, “Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit.”
In the final order, the High Court allowed the writ petition and quashed the Ext.P1 assessment order and Ext.P2 recovery notice dated 20.08.2022 and 24.07.2023, respectively. The matter is now sent back to the Assessing Officer for fresh consideration, and he has been instructed to give the petitioner an opportunity to present all relevant documents to support the ITC claim, regardless of what is displayed in GSTR-2A.
The petitioner has been directed by the Kerala court to appear before the Assessing Officer (AO) on October 03, 2023, at 11:00 AM, along with all supporting evidence for the claimed ITC. After analysing all the evidence, AO must issue fa resh decision.
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