Top Stories GST Authorities Erroneously Debit wrongly availed ITC from ECL Despite Subsequent Reversal in GSTR-3B: Madras HC quashes GST Assessment Order [Read Order] The petitioner submitted the documentations, including the GSTR 3B return for the assessment year 2023-2024, validating the ITC reversal By Navasree A.M – On April 4, 2024 1:11 pm – 2 mins read The Madras High Court has quashed the Goods and Services Tax ( GST ) Assessment Order in the matter were the authorities debited the wrongly availed Input Tax Credit from Electronic Credit Ledger ( ECL ) subsequent to the reversal in the Goods and Services Tax Returns – 3B ( GSTR-3B ). The matter was remanded back for reconsideration. The petitioner had purchased a car during the assessment year 2021-2022 and mistakenly claimed ITC associated with the purchase. However, realising the error, the petitioner duly reversed the ITC in the subsequent GSTR 3B return. The matter arose when despite the reversal of ITC, the petitioner received the impugned GST assessment order.

It was revealed that a significant sum of Rs.73,690/- each towards CGST and SGST had been reversed in the GSTR 3B return. Furthermore, an additional sum of Rs.71,706/- was debited from the petitioner’s electronic credit ledger post the issuance of the impugned order. Mr. K.M.Malarmannan, the petitioner’s counsel drew attention to the GSTR 3B return and pointed out that a sum of Rs.73,690/- each towards CGST and SGST was reversed under the said return. He also pointed out that subsequent to the impugned order, a further sum of Rs.71,706/- was debited from the electronic credit ledger of the petitioner. In response, Mrs. K. Vasanthamala, the Government Advocate, asserted that the impugned order was issued without awareness of the ITC reversal in the GSTR 3B return.

The respondent side admitted the error impliedly. The petitioner submitted the documentations, including the GSTR 3B return for the assessment year 2023-2024, validating the ITC reversal. Upon careful examination, the bench of Justice Senthilkumar Ramamoorthy concluded that the impugned order had erroneously proceeded under the assumption that ITC had not been reversed. Consequently, the Court deemed it necessary to quash the order and remand the matter for reconsideration. The High Court granted the petitioner permission to respond to the SCN dated 19.04.2023 and to submit all pertinent documents alongside the response within a maximum period of two weeks from the date the petitioner receives a copy of the order. The assessing officer was instructed to afford the petitioner a fair opportunity, including a personal hearing upon receiving the reply and to issue a fresh assessment order within two months from the date of receiving the petitioner’s reply.