Facts of the Case

Marvel Associates, a partnership firm dealing in plastic tubes and fittings, registered under the CGST/SGST Act, faced proceedings after a Form GST ASMT-10 notice pointed to a discrepancy: the firm had availed input tax credit in GSTR-3B of Rs. 1,12,862/- in excess of what appeared in its GSTR-2A, allegedly in contravention of Section 16(2)(c) of the CGST Act. Despite the firm's reply, the first respondent passed an order under Section 73 read with Rule 142 of the CGST Rules on 28 May 2022, along with a summary order in Form DRC-07. The firm's case was that the discrepancy was inadvertent, that it had already reversed a related amount of Rs. 1,28,748.54 in its February 2020 GSTR-3B to 'purchase peace', and that no further liability should attach. When a recovery notice was issued in June 2023, the firm approached the Kerala High Court for the first time — over a year after the original order — seeking to quash it.

Issues Involved

  1. Whether the Section 73/GST orders dated 28 May 2022 could be quashed in writ jurisdiction, more than a year after they were passed and well beyond the appeal period under Section 107 of the CGST Act.
  2. Whether a taxpayer who failed to submit its ASMT-10 reply and did not rectify the alleged error under Section 39(9) of the CGST Act in time could later seek to reopen the matter through a writ.

Petitioner's Arguments

  • The excess ITC in GSTR-3B compared to GSTR-2A arose from an inadvertent filing error, not deliberate wrongful availment.
  • The petitioner had voluntarily reversed a related amount in February 2020 and was, in substance, not liable for further demand; the department's orders had been passed without proper scrutiny.
  • Since the statutory appeal period under Section 107(4) of the CGST Act had lapsed, the petitioner was left remediless and the writ petition should be entertained to prevent injustice.

Respondent's Arguments

  • The petitioner had failed to submit the ASMT-10 form within the stipulated time and had not availed the opportunity to rectify the alleged error under Section 39(9) of the CGST Act when it could have.
  • The orders dated 28 May 2022 were appealable under Section 107 of the CGST Act, but that remedy was now time-barred through the petitioner's own delay — the petitioner had approached the High Court only after a year.

Court Order / Findings

  • The Court held there was wilful negligence on the petitioner's part: it had failed to file the ASMT-10 form on time, failed to use the Section 39(9) rectification route, and failed to file a statutory appeal — and only challenged the orders in writ jurisdiction after about a year.
  • It reiterated the settled position that although no specific limitation applies to filing a writ petition under the Constitution, a writ must still be filed within a reasonable time, and what a petitioner failed to do directly through the statutory remedy cannot be achieved indirectly through a belated writ petition.
  • The Court held that its extraordinary constitutional jurisdiction is to be exercised sparingly and in exceptional cases, and found no such exceptional circumstance here.
  • The writ petition was dismissed as groundless.

Important Clarification

The order does not adjudicate whether the underlying GSTR-3B/GSTR-2A mismatch demand was correct on its merits — it turns entirely on the petitioner's delay in pursuing the correct remedies (ASMT-10 reply, Section 39(9) rectification, and timely statutory appeal under Section 107). The clear practical lesson for GST taxpayers is that ITC-mismatch notices and Section 73 orders must be responded to and appealed within their statutory time limits; a writ petition filed long after those windows have closed is unlikely to succeed merely because the appeal period has lapsed.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — Sections 16(2)(c), 39(9), 73 and 107
  • CGST Rules, 2017 — Rule 142; Form GST ASMT-10, Form GST DRC-07

Decision – In Favour of

Decided against the petitioner; the writ petition was dismissed for delay and failure to exhaust statutory remedies, without a ruling on the merits of the ITC-mismatch demand itself.

Case Details

Court: High Court of Kerala at Ernakulam
Case No.: WP(C) No. 20038 of 2023
Coram: Hon'ble Mr. Justice C.S. Dias
Date of Judgment: 10 July 2023

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