Facts of the Case

The petitioner, Tvl. Velmurugan Plastics, challenged an assessment order dated 13.08.2024 for tax period 2019-20, passed following a show cause notice in Form GST DRC-01 dated 28.05.2024 to which the petitioner had replied. The demand arose from an alleged mismatch between GSTR-3B and GSTR-2A, with the petitioner contending that the input tax credit was availed based on auto-populated data in GSTR-2A and Table 8A of GSTR-9 filed by the supplier. The entire tax amount demanded was recovered on 21.11.2024 directly from the petitioner's electronic credit ledger. By the time the petitioner sought to challenge the order, the statutory appeal limitation had lapsed, as the order was allegedly not noticed since it was merely hosted on the portal.

Issues Involved

  1. Whether a taxpayer who has not filed a statutory appeal within the limitation period, but whose entire disputed tax has already been recovered by the department, should be granted an opportunity to file a belated appeal.
  2. How ITC-mismatch disputes arising from reliance on supplier-filed GSTR-2A/GSTR-9 auto-populated data should be examined.

Petitioner's Arguments

  • The ITC was availed based on auto-populated GSTR-2A data and Table 8A of the supplier's GSTR-9, and there is a prima facie case that the demand may not be sustainable.
  • The order was not noticed in time as it was merely hosted on the GST portal and the petitioner, being a small dealer, was unaware of this mode of communication.
  • The entire tax amount has already been recovered, causing no further outstanding demand.

Respondent's Arguments

  • The writ petition is barred by limitation, relying on the Supreme Court decisions in M/s Singh Enterprises v. CCE, CCE v. Hongo India, and Assistant Commissioner (CT), LTU v. Glaxo Smith Kline Consumer Health Care.

Court Order / Findings

  • The Court observed that the petitioner may have a prima facie case that the tax demand is unsustainable on the ITC-mismatch issue, though it had admittedly not filed an appeal within the statutory period.
  • Balancing the interests of justice and noting that the entire tax amount had already been recovered, the Court extended indulgence to the petitioner.
  • The petitioner was directed to file a statutory appeal before the Appellate Commissioner (GST) within thirty days, to be entertained and disposed of on merits without reference to limitation, considering that recovery had already been effected.

Important Clarification

  • Where the entire disputed tax demand arising from a GSTR-3B/GSTR-2A ITC mismatch has already been recovered from the taxpayer, courts are inclined to grant indulgence for filing a belated statutory appeal on merits, treating the fact of recovery as removing any prejudice to the Revenue from a delayed appeal.

Sections Involved

  • Section 73, CGST Act, 2017 – determination of tax not paid (non-fraud cases), invoked here for the ITC-mismatch demand.
  • Section 107, CGST Act, 2017 – statutory appeal to the Appellate Authority and limitation.
  • GSTR-2A, GSTR-3B, GSTR-9 (Table 8A) – return forms whose mismatch formed the basis of the demand.

Decision – In Favour of

Disposed of in favour of the Assessee to the extent of permitting a belated appeal to be heard on merits, without a finding on the correctness of the ITC-mismatch demand itself.

Case Details

Madurai Bench of Madras High Court; W.P.(MD)No.23339 of 2025 with W.M.P.(MD)No.18340 of 2025; Coram: Hon'ble Mr. Justice C. Saravanan; Order dated 26.08.2025.

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