The Hon’ble Madras High Court has directed that ITC cannot be entirely rejected solely based on the grounds of Non claim in GSTR-3B
M/S Sri Shanmuga Hardwares Electricals vs The State Tax Officer
Fact of the case:
The authorities denied ITC claim of the petitioner for FY 2017-18, 18-19, 19-20 by passing an order on the grounds that the same wasn’t claimed through GSTR-3B as nil returns were erroneously filed in the GSTR-3B.
The petitioner argues that the ITC for the said financial years are duly reflected in the GSTR-2A returns and the same was duly claimed by reflecting the ITC claims in the annual returns GSTR-9.
Observations:
The Taxpayer erroneously filed nil return in GSTR-3B for the F.Y. 17-18, 18-19 & 19-20. This led to non-claim of ITC in such returns.
The Taxpayer claimed such ITC in GSTR-9 stating the eligibility of the same by referring that it was duly reflected in GSTR-2A, refusing which the authorities denied such claim of ITC through GSTR-9 just on the grounds that the same was not claimed in GSTR-3B.
The Taxpayer argued that their ITC claim exceeds the tax liability and is not liable to pay any tax.
Conclusion:
The Hon’ble High Court by quashing the orders of the authorities permitted taxpayers to claim ITC through GSTR-9. High Court further said that denying the claim of ITC through GSTR-9 solely on the grounds that the same wasn’t claim in GSTR-3B even though it is duly reflected in GSTR-2A isn’t justified.
SW Point of View:The commendable stance taken by the esteemed Court is admirable. While numerous High Courts are refusing to grant credit due to the constraints of Section 16(4), permitting credit based on GSTR 9 will undoubtedly provide significant assistance to numerous taxpayers who unintentionally neglected to claim credit in GSTR 3B but eventually rectify in annual compliances.
