Invoices issued at inactive GSTIN

Facts of the Case

1. Migrated GSTIN not allotted to the assessee as per working of common portal.
2. New GSTIN applied and GSTIN was communicated to assessee. This GSTIN was communicated by assessee to all its business associates. However, department fail to allot this GSTIN and advised assessee to apply afresh. (hereinafter referred as “GSTIN 2”)
3. Assessee applied GSTIN for the third time and the same as alloted. (hereinafter referred as “GSTIN 3”)
4. Some vendors issued tax invoices at GSTIN 2 and some issued tax invoices at GSTIN 3.
5. Notice issued to the assessee to payback the input tax credit not appearing in Form GSTR-2A of GSTIN 3.

Our Analysis

1. Status of all vendors is ‘Active’ and they have filed the returns for latest tax period. This implies that tax in respect of which input tax credit has been availed by the noticee has been paid to the credit of Central Government.
2. Jurisdictional High Court in case of Vadehra Builders Private Limited Vs UoI in WP No. 9963 of 2019, vide interim orders, permitted the department to verify the records and allow the rectification in the interest of justice. In the said case, vendors filed their GSTR-1 mentioning the wrong GSTIN which lead to auto-population of incorrect details in GSTR-2A of the recipients.
3. First due date to furnish GSTR-1 for the tax periods falling in FY 2017-18 was 10.01.2018. Therefore, Form GSTR-2A was not available to verify, add, delete or modify the details of input tax credit so that statement of inward supplies can be furnished in Form GSTR-2.
4. Form GSTR-2 and GSTR-3 were not made operational. Return in Form GSTR-3B was filed wherein the details were not auto-populated from the details to be furnished in Form GSTR-1 and GSTR-2. Registered persons were executing the compliances with provisions of GSTR-1 and GSTR-2 manually.
5. Therefore, the claims made in Form GSTR-3B by the assessee were as per inherent scheme of law wherein they effectively modified / added the details of inward supplies in Form GSTR-2A.
6. Statutory scheme of GSTR-1, GSTR-2A, GSTR-2 and GSTR-3 is not merely a procedure but a right.
7. In Annual Return, assesse self assessed the entire input tax credit. Also, as per Form GSTR-9C, entire ITC was accounted for in books of account maintained by assessee for GSTIN 3.

Our Action

1. Detailed legal representation was prepared and submitted on common portal.
2. Physical copies of the invoices were produced for verification by proper officer.

Department proceedings

1. In the interest of justice, fair play, equity and in light of issue of similar nature dealt with by jurisdictional high court, assessing officer find force in the submissions made by us and he considered it to be a fit case of valid compliances made under the law. He accordingly dropped the proceedings.