Written Reply Cannot Replace Personal Hearing; GSTR‑9 Mismatch Alone Not Proof: GSTAT Bengaluru

The GST Appellate Tribunal’s Bengaluru Bench set aside an excess-ITC demand for 2018-19, holding the Section 75(4) hearing mandatory and remanding for verification from books where the taxpayer said its annual return was wrong.

The GST Appellate Tribunal, Bengaluru, has held that a personal hearing under Section 75(4) of the CGST Act, 2017 is a separate right that a written reply does not replace, and that a mismatch between GSTR‑3B and GSTR‑9 is not by itself proof of excess input tax credit (ITC). The Bench of Prabhakaran P M, Member (Judicial), who wrote the order, and Ravi Jesuraj S, Member (Technical), set aside the demand and remanded the matter [Belgaum Ferro Cast (India) (P) Ltd v. Satish P Kelavadi & Ors., 2026-juristway.com-3225-GSTAT(Bengaluru)-GST].

An audit for 2018-19 compared the appellant’s ITC in GSTR‑3B with its GSTR‑9 and alleged excess availment of about ₹7.37 lakh. A show cause notice (SCN) under Section 73(1) followed on 30 Jun 2023, and the demand was confirmed without a personal hearing. The first appellate authority treated the written reply as sufficient opportunity.

The appellant maintained that its GSTR‑9 contained errors, that it had never admitted any excess claim, and that its books and GSTR‑9C showed none. The Department said the GSTR‑9 had been prepared from audited books.

The Bench held that an order confirming a demand is adverse, so a hearing was mandatory, and the defect was not cured in appeal. On merits, it found that the officer had deducted reverse charge credit from a GSTR‑3B table without checking the returns, recorded an admission the record did not show, and rejected the plea of error without examining the books. Its own comparison of the relevant tables yielded ₹6,67,890, not the figure demanded.

Citing Central Board of Indirect Taxes and Customs v. Aberdare Technologies (P) Ltd. (2025), the Bench said a bona fide error in a return is to be treated as an error, while noting that the burden of proving the credit lies on the appellant under Section 155. A mismatch between two returns, it held, “is a good reason to examine the records. It is not, by itself, proof that credit was availed in excess.”

The adjudication order, the appellate order and the related rectification order were set aside. The appellant must produce its books, ITC registers, returns and RCM ledgers within 30 days of receiving the order. The officer must first identify which GSTR‑9 was actually filed, stay within the SCN, and decide within three months.

2026-juristway.com-3225-GSTAT(Bengaluru)-GST