Can GST input be claimed by manual filing of GSTR-3B without payment of output taxes? High Court said yes...

Issue:

In this case, taxpayer has claimed ITC in FY 2017-18 & 2018-19 by manual filing of GSTR-3B without payment of output taxes, because he was facing financial crisis and was not able to pay his output taxes, which is a mandatory pre-requisite in online filing of GSTR-3B on GST Portal. so taxpayer opted to file physical GSTR-3B claiming his ITC without payment of output taxes. And after some time, taxpayer filed belated GSTR-3B online.

Based on the scrutiny and verification of GSTR-3B returns filed by the petitioner, GST Department issued notice to show cause why there was a belated claim of Input Tax Credit (ITC) and also directed to remit back the same as wrong claim of ITC and proposed to reverse the same. 

Petitioner:

Petitioner submitted that due to financial crisis the petitioner had submitted GSTR-3B physically and the same was already explained to the respondents in person and hence the allegation by the respondents that the said claim is false cannot be accepted.

The contention of the petitioner is that he had also explained the fact that the claim of ITC is described under Rule 60 of the GST Rules and the Form prescribed is Form GSTR-2, but the same was not notified. Moreover, the filing of GSTR-3B is to avail the input tax credit and not for claiming the same. So the reversal of input tax for belated claim as per Section 16(4) of GST Act is not applicable, since the filing of GSTR3B is not meant for claim of input tax credit.

The further contention of the petitioner is that the sales made to the petitioner and the tax collected from the petitioner were duly reported by other end supplier through their respective GSTR- 1 and the petitioner could not claim the same since Form GSTR-2 is not notified. Hence, the petitioner has accounted the purchases and credited the tax payment made through tax invoice, claimed ITC in the books of accounts and availed the same through GSTR-3B filed physically. Hence, the allegation of belated claim of ITC itself is false and misleading.

Moreover, GSTR-3B is not at all returned as prescribed in Section 39 of the GST Act. As per Notification No. 49/2019 - Central Tax, dated 09.10.2019, the Government declared that the reconciliation statement GSTR-3B may be treated as GSTR-3 in retrospective manner and the same is not correct and the same is against the Constitution. Hence, the petitioner has approached this Court to quash the impugned order.

High Court:

:

Input Tax Credit

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GSTR-3B

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