Supreme Court Dismisses SLP against HC Order quashing GST Demand in case of GSTR-3B and 2A mismatch

The Supreme Court of India in the case of Suncraft Energy Pvt. Ltd. has dismissed the department’s SLP against the Calcutta HC judgment.

It was held that the purchasing dealer’s ITC cannot be denied by the department on the ground that the supplying dealer has not remitted the tax so collected unless there is an exceptional case like the supplier going missing or any situation wherein it becomes impossible for the department to collect tax from such a supplier. Until there is a remote chance of recovering the tax from the supplying dealer, the department shall not deny ITC to the purchasing dealer.

Against this order, the Department filed an SLP in the Supreme Court (Diary No. 44242/2023).

Facts and Order:

SC dismissed Revenue’s SLP against Calcutta HC decision which quashed the demand of ITC against the service recipient for a mismatch in GSTR 2A and GSTR 3B in the absence of any investigation done at the end of the supplier whose invoices are not reflected in GSTR 2A.

HC cited lack of exceptional cases like missing dealers, closure of business by supplier or supplier not having adequate assets etc. and straight away concluded that “Revenue was not justified” and directed the assessee to reverse the ITC availed by it.

The SLP was dismissed today by Justice B.V. Nagarathna and Justice Ujjal Bhuyan and the Calcutta High Court judgment has been upheld.

This comes as a massive victory for honest taxpayers. The order copy of the judgment is yet to be released.

For Official Judgment Download PDF Given Below: