The Goods and Services Tax Appellate Tribunal (GSTAT), State Bench at Thane, has set aside an order arising from the denial of input tax credit (ITC) on mismatch grounds after finding that the taxpayer had not been provided adequate details of the alleged discrepancies or sufficient opportunity of personal hearing.

The bench of Ramesh Nair (Judicial Member) and Prallhad S. Paranjape (Technical Member) has observed that the proceedings suffered from a gross violation of the principles of natural justice at both the adjudication and first appellate stages. It remanded the matter to the adjudicating authority for fresh consideration and a reasoned order, preferably within three months of its October 7, 2026 order.

Buy Now: 195+ ITC Judgements Along With GSTAT Rulings – 2017 To 2026

The State GST department had disallowed ITC on the ground of a mismatch. Following the issuance of a show cause notice, the adjudicating authority confirmed the proposed ITC demand.

The taxpayer challenged that decision before the first appellate authority, which dismissed the appeal. He subsequently approached the tribunal, questioning both the disclosure of the alleged mismatch and the opportunity afforded to contest the demand.

The legal issue identified by the tribunal concerned the taxpayer’s entitlement to ITC under Section 16 of the Central Goods and Services Tax Act, 2017, read with the Maharashtra Goods and Services Tax Act, 2017, where the lower authorities had rejected the credit on mismatch grounds.

Appearing for the taxpayer, Chartered Accountant Surinder Mehra submitted that the adjudicating authority had neither specified the mismatch details adequately in the show cause notice nor supplied them subsequently to enable an explanation.

He argued that there was no mismatch if the overall period was considered and that the taxpayer had correctly claimed the credit. This remained the taxpayer’s contention; the tribunal did not decide its correctness.

The taxpayer also challenged the conduct of the first appellate proceedings. His representative submitted that an adjournment had been requested through email on the second hearing date, but the request was not granted and an ex parte order followed.

For the department, Deputy Commissioner Chhagan Jaybhay informed the tribunal that the detailed ITC mismatch chart had been submitted on the portal only on October 6, 2026—the day before the tribunal’s order.

After hearing both sides and examining the records, the tribunal found that the show cause notice did not fully disclose the mismatch details needed for the taxpayer to explain his case.

It also noted that the detailed mismatch chart had been submitted only at the tribunal stage and had not been before the adjudicating authority. Consequently, the earlier adjudication had proceeded without that detailed chart being available before the authority.

The bench separately found that the first appellate authority had failed to provide sufficient opportunity of personal hearing.

On these facts, the tribunal concluded that there had been a gross violation of natural justice at every stage, encompassing both the original adjudication and the first appeal. It held that the entire matter required reconsideration on all aspects by the adjudicating authority.

The tribunal directed the adjudicating authority to provide the taxpayer with the mismatch details and grant sufficient opportunities to explain his case.

Membership Required to Access Case Details & Order Copy

To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.

Read More: E-Governance Portal Services Not OIDAR, Fixed Deposit Interest Not Taxable: CESTAT