Kishore Projects Private Limited vs. State Of Gujarat

Held

The Court allowed the petition, permitting the petitioner to approach the appellate authority. The Court relied on the Supreme Court's decision in Union of India Vs. Bharti Airtel Ltd. & Ors. (2022) 4 SCC 328, which held that Form GSTR-2A is only a facilitator for taking an informed decision during self-assessment. The Court also considered the personal circumstances of the petitioner. Consequently, the appellate authority was directed to decide the matter on merits without raising an objection regarding the limitation period. The petitioner was directed to deposit Rs. 2,02,245 as pre-deposit within two weeks. Upon deposit, the petitioner could request the release of their bank account from the appellate authority, which was to be decided within one week. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Kishore Projects Private Limited, filed a writ petition before the Gujarat High Court challenging an order dated 07/04/2022 passed under Section 73 of the GST Act. This order raised a demand of Rs. 31,95,464, comprising tax, interest, and penalty, due to a mismatch between Input Tax Credit (ITC) claimed in GSTR-3B and reflected in GSTR-2A for the year 2019-2020. The petitioner contended that the mismatch occurred because their suppliers failed to file their returns, despite the petitioner having paid for the goods and issued invoices. The petitioner also explained their inability to file an appeal within the statutory period of three months due to personal reasons. The court noted that the petitioner had missed the appeal deadline and was seeking recourse due to a provisional attachment order.

Key Issues

1. Whether the demand raised under Section 73 of the GST Act, 2017, for a mismatch in ITC between GSTR-2A and GSTR-3B, where the mismatch is attributed to the non-filing of returns by suppliers, is sustainable, particularly in light of the Supreme Court's decision in Union of India vs. Bharti Airtel Ltd. & Ors.? Petitioner's Arguments: The petitioner argued that the demand is unsustainable as the mismatch was not due to their fault but due to the suppliers' non-compliance. They relied on the Supreme Court's ruling in Union of India vs. Bharti Airtel Ltd. & Ors. (2022) 4 SCC 328, asserting that GSTR-2A is merely a facilitator for self-assessment and not a conclusive document for raising demands. They also highlighted their inability to file an appeal within the limitation period due to personal tragedies. Revenue's Arguments: The revenue contended that the issue arose due to a mismatch of Rs. 20,22,446 in ITC. They also raised the ground of limitation, stating that an appeal beyond three months under Section 107 of the GST Act is not permissible as the authority lacks the power to condone such delays.