Prior-Year Credit Claimed Within Section 16(4) Time Explains GSTR‑2A Mismatch: GSTAT Prayagraj

GSTAT Prayagraj deleted a ₹1.93 lakh ITC demand after verifying that 2018-19 invoices were claimed in 2019-20 returns in time, and held Circular No. 183/15/2022-GST inapplicable.

GSTAT Prayagraj has held that a demand based only on a mismatch between GSTR‑2A and GSTR‑3B for a single year cannot stand where the excess is credit of the previous year availed within the time allowed by Sections 16(4) and 39(9). [Sarthak Traders v. Commissioner Uttar Prades State Tax, Grade-2 (Appeal) Prayagraj & Ors., 2026-juristway.com-3184-GSTAT(Prayagraj)-GST]

The Bench of Mahtab Ahmad, Member (Judicial), and Ashish Varma, Member (Technical), allowed the appeal of a Prayagraj mobile phone and recharge trader to that extent. Ashish Varma wrote the order.

For 2019-20, the officer found ITC of ₹3,04,303.37 in GSTR‑3B against ₹1,11,353.40 in GSTR‑2A and confirmed excess credit of ₹1,92,949.93 ex parte. The first appellate authority dismissed the appeal when the appellant did not appear, holding under Circular No. 183/15/2022-GST that chartered accountant or supplier certificates were required.

The Bench held the appellate order non-speaking, as it never dealt with the claim that the credit belonged to 2018-19. Relying on M/s Archita Tour and Travels v. State of U.P. ((2024) 10 ILRA 201), it held that Section 107(12) requires a reasoned decision on the grounds even if the appellant is absent. The circular deals with supplier-side errors for 2017-18 and 2018-19, and no supplier’s discrepancy here could exceed ₹5 lakh.

Rather than remand, the Bench verified the invoice-wise reconciliation itself. Credit of ₹2,28,742.82 from 2018-19 invoices was claimed in GSTR‑3B returns for April and July 2019, filed well within time, and the total credit claimed stayed within that reflected in GSTR‑2A for both years.

The ITC demand, with interest and penalty, was quashed, with refund of the pre-deposit and interest under Section 115. The output tax difference of ₹7,572.44, accepted and paid by the appellant, was not disturbed.

2026-juristway.com-3184-GSTAT(Prayagraj)-GST