Belgaum Ferro Cast (India) (P) Ltd, Belagavi-vs-Satish P Kelavadi, The Commissioner of Commercial Taxes, Karnataka Bengaluru.-2026-juristway.com-3225-GSTAT(Bengaluru)-GST

Belgaum Ferro Cast (India) (P) Ltd v Satish P KelavadiGSTAT · Bengaluru · 2026

Alt+← → switch · Alt+W close · right-click for options

2026-juristway.com-3225-GSTAT(Bengaluru)-GSTBelgaum Ferro Cast (India) (P) Ltd v Satish P Kelavadi

✓ Good LawRemanded2 Judge Bench

TreatmentNot yet cited by a later judgment

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

Belgaum Ferro Cast (India) (P) Ltd, Belagavi

versus

Satish P Kelavadi, The Commissioner of Commercial Taxes, Karnataka Bengaluru.

Court - Bench

GST Appellate Tribunal (GSTAT) - Bengaluru

Date of Judgment

30 October 2026

Judges

Mr. Ravi Jesuraj S, Member (Technical), Prabhakaran P M, Member (Judicial)

Case Number

APL/30/BUR/2026

Advocate (Petitioner)

Shri Mukund Nyalkalkar - Advocate

Advocate (Respondent)

Shri Thippa Nayak - Deputy Commissioner and Department Representative

Quick ref

Takeaway

ITC — GSTR-3B vs GSTR-9 Mismatch — Personal Hearing Under Section 75(4) — A written reply does not substitute for a personal hearing under Section 75(4) before an adverse order, and the defect is not cured in first appeal. A mismatch between GSTR-3B and GSTR-9 warrants examination of the books but is not, by itself, proof of excess ITC; where the taxpayer pleads an error in GSTR-9, the authority must test it against the books while the taxpayer discharges its burden under Section 155.

Digest & Analysis

Litigation Digest

In Belgaum Ferro Cast (India) (P) Ltd. v. Commissioner of Commercial Taxes, Karnataka, 2026-juristway.com-3225-GSTAT(Bengaluru)-GST, where, following an audit report dated 16.02.2023 and a show cause notice dated 30.06.2023, excess ITC of Rs. 7,37,165 (IGST Rs. 78,823; CGST and SGST Rs. 3,29,171 each) for FY 2018-19 was confirmed with interest of Rs. 5,97,105 and penalty of Rs. 73,716 by an order dated 30.09.2023 passed without personal hearing, on the basis that GSTR-3B ITC of Rs. 7,21,65,748 (after excluding RCM credit of Rs. 5,24,259) exceeded the Rs. 7,14,28,585 in GSTR-9, and the first appeal was dismissed on 26.05.2025 while a rectification application dated 26.10.2023 was later rejected by order dated 05.06.2025, the Tribunal held that Section 75(4) confers a separate right of hearing that a written reply does not displace and the defect was not cured in appeal (paras 4.3–4.5); that the adjudication suffered from three infirmities, namely assuming without verification that RCM credit sat in Table 4(A)(5), recording an admission of excess credit that the record did not show, and rejecting the plea of error in GSTR-9 without examining the books, the correct Table 6B comparison itself yielding Rs. 6,67,890 and the parties' copies of GSTR-9 differing (paras 4.14–4.20); and that, while a bona fide return error must be recognised (Aberdare Technologies), the appellant bears the burden under Section 155 (paras 4.22–4.31); the adjudication order, OIA and rectification order were set aside and the matter remanded for fresh adjudication confined to the show cause notice and its amounts, with the appellant to produce its books and returns within thirty days and an order to issue within three months.

Detailed Case Analysis

(i) Whether the adjudication order, passed without a personal hearing, breaches Section 75(4), and if so whether the defect was cured in first appeal.

(ii) Whether the finding that the appellant availed excess ITC of Rs. 7,37,165 in its GSTR-3B returns for 2018-19 is sustainable on the record.

(iii) What relief should follow.

Hearing (paras 4.2–4.5). Section 75(4) mandates a hearing where any adverse decision is contemplated. Following Rohit Vij (Delhi High Court) and Bharat Mint and Allied Chemicals (Allahabad High Court), the Tribunal held that a hearing is a separate right that a written reply does not replace. The defect was not cured in first appeal, where the authority did not examine GSTR-9C, the books or the reconciliation and simply adopted the department's figures.

Merits (paras 4.6–4.20). The Form GSTR-3B requires RCM credit to be reported in Table 4(A)(3), but whether the appellant had in fact reported Rs. 5,24,259 in Table 4(A)(5) was a question of fact to be verified from the April and May 2018 returns, which was not done. The comparison of adjusted Table 4(A)(5) ITC with Table 6B of GSTR-9 itself yielded a difference of Rs. 6,67,890, not Rs. 7,37,163. The recorded admission of excess credit was not borne out. GSTR-9 as filed on 20.08.2020 showed a Table 6J difference of Rs. 6,67,891 that neither the audit nor the notice had identified, the appellant's GSTR-9C did not explain that difference, and the copies of GSTR-9 produced by the two sides differed in rows M, N and O of Table 6.

Return errors and burden (paras 4.21–4.31). Neither Section 44 nor Rule 80 permits revision of GSTR-9 once filed. Drawing on Aberdare Technologies and Bharti Airtel, the Tribunal held that a bona fide error in a return is to be recognised as an error and not as a source of tax, while returns must be corrected within the statutory scheme. The appellant, having reported the GSTR-9 figures, bears the burden under Section 155 and must discharge it with its books and invoices; the authority must afford it the opportunity. A mismatch between two returns is a reason to examine records, not proof of excess credit. Exercising power under Section 113(1), the Tribunal remitted the matter, expressing no final view on merits.

The adjudication order breached Section 75(4) and the defect was not cured in first appeal; the finding of excess ITC was unsustainable as it rested on unverified assumptions, an unsupported admission and a refusal to examine the books. The matter required fresh adjudication on the books and returns.

The adjudication order dated 30.09.2023 with DRC-07 dated 09.10.2023, the OIA dated 26.05.2025 and, to the extent relevant, the rectification order with Form GST DRC-08 were set aside along with the demand of tax, interest and penalty. The matter was remanded for fresh adjudication confined to the show cause notice dated 30.06.2023, without exceeding its heads, grounds or amounts. The appellant is to produce, within thirty days, its books, month-wise registers of eligible and ineligible ITC, GSTR-3B with working papers, GSTR-9 and GSTR-9C as filed, RCM ledgers including the March 2018 RCM claimed in April and May 2018, and credit brought forward from 2017-18 and carried forward to 2019-20. The authority is first to ascertain from the portal which GSTR-9 was filed, and to decide within three months.

✎ Editor's Note

For the large number of FY 2017-18 to 2019-20 demands built on GSTR-3B versus GSTR-9 comparisons, this order offers a structured defence: insist on a hearing under Section 75(4) even after filing a written reply; demand that the officer identify the specific tables compared; and point out where RCM, transition or carry-forward credits have been mixed into the comparison. The remand directions are a ready-made checklist of what a taxpayer must produce, including month-wise eligible and ineligible ITC registers and the opening and closing credit positions across years, and should be prepared before the hearing rather than after notice. The Tribunal's protective direction confining fresh adjudication to the heads and amounts in the show cause notice is worth seeking in every remand. A caution: the Tribunal's observation that GSTR-9 cannot be revised underlines that an error there can be cured only by evidence from the books, and the GSTR-9C filed by this appellant did not explain the Table 6J difference; unreconciled annual returns weaken the error plea considerably.

Disclaimer: This content reflects the editor's personal views and should not be treated as a legal opinion or professional advice.

Full Text

Judgment & Order

14px