The Tribunal held that Section 35(6) cannot be equated with VAT-era deemed sale provisions and that the Supreme Court's DVAT ruling in Nathu Ram Ramesh Kumar is distinguishable.
The Goods and Services Tax Appellate Tribunal, Bengaluru Bench, has partly allowed an appeal by a cutting-tools manufacturer, setting aside tax demanded on estimated "deemed sales" from allegedly unaccounted inward supplies, along with demands relating to credit notes and interest on ITC already reversed [Sandvik Coromant India Pvt Ltd v. Commissioner of Commercial Taxes, Karnataka].
The Bench of Prabhakaran P.M. (Judicial Member) and Ravi Jesuraj S. (Technical Member) held that the First Appellate Authority's reliance on Nathu Ram Ramesh Kumar v. Commissioner of DVAT was misplaced, as that decision rested on a VAT provision permitting a notional addition to sales; GST has no such concept and Section 35(6) cannot be equated with it.
Applying Kranti Associates and the recent Supreme Court ruling in ASP Traders v. State of U.P., the Tribunal found the orders below failed to deal with the reconciliation produced. On its own examination, each of the 46 e-way bills was linked to an invoice and accounting entry in the purchase register, and the demand was set aside.
Of the Rs. 3.96 lakh ITC disallowed for GSTR-3B versus GSTR-2A difference, Rs. 3.45 lakh was allowed and Rs. 51,255 confirmed with interest under Section 50(3) read with Rule 88B. The demand of Rs. 99,718 on credit notes for sales returns not reported in GSTR-1 was set aside, as was interest and penalty on ITC that had been reversed before the show cause notice.
2026-juristway.com-3009-GSTAT(Bengaluru)-GST | GSTAT, Bengaluru | 14.10.2026
