The Goods and Services Tax Appellate Tribunal (GSTAT), State Bench at Prayagraj, has directed the department to produce the supplier’s relevant GSTR-1 and GSTR-3B returns or explain, on the basis of material available on record, how non-payment of tax and the buyer’s alleged ineligibility to avail and utilise input tax credit could be established.
The bench of Mahtab Ahmad (Judicial Member) and Ashish Varma (Technical Member) has directed the department to either produce copies of the supplier’s GSTR-1 and GSTR-3B returns for the relevant months or explain how the record established that the tax relating to the transaction had not been paid to the department.
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The appellant submitted that the supplier had filed the corresponding GSTR-1 and GSTR-3B returns. It was further contended that the transaction had been automatically reflected in the appellant’s GSTR-2A for the financial year 2018–19.
The appellant also maintained that the tax relating to the transaction had been duly paid. These submissions placed the supplier’s return filings and payment of tax at the centre of the dispute over the appellant’s entitlement to the input tax credit.
After hearing arguments, the tribunal recorded that neither the supplier’s GSTR-1 nor its GSTR-3B returns for the relevant months were available on the portal, despite several attempts to search for them.
The order does not treat the inability to locate those returns as a conclusive finding that the supplier failed to pay tax. Instead, the tribunal called upon the Revenue to provide the returns or explain the basis for its position using the material already available on record.
This distinction is central to the interim direction: the appellant asserted that returns had been filed and tax paid, while the tribunal could not verify the relevant returns through the portal.
The Revenue was also asked to explain how it could be established that the appellant was not entitled to avail and utilise the disputed input tax credit without reversal, thereby attracting Section 74 of the GST Act, 2017.
The direction therefore requires the Revenue to address both the alleged non-payment of tax by the supplier and its consequences for the appellant’s disputed credit. The tribunal has sought a response grounded in the evidence available in the case.
The order is an interim procedural direction and does not finally allow or reject the appellant’s claim to input tax credit. It also does not conclusively determine whether the supplier paid the tax relating to the transaction or whether Section 74 was correctly invoked.
Likewise, the tribunal has not held that reflection of a transaction in GSTR-2A, by itself, conclusively establishes entitlement to input tax credit. The appellant’s submissions on return filing, auto-population and payment of tax remain subject to further consideration.
By calling for the supplier’s returns or an explanation supported by the record, the tribunal has sought further clarification before deciding the dispute.
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