Case Summary
Case Title: Tvl. M. Malar v. State Tax Officer
Court: Madurai Bench of Madras High Court
Petition No.: W.P.(MD) No.20664 of 2025
Date of Judgement: 30.07.2025
Category of Dispute: Input Tax Credit – discrepancy between GSTR-2A and GSTR-3B (IGST on imports)
Relevant Sections: Section 16, Section 17, Section 73 of the CGST Act, 2017; Rules 36 and 86 of the CGST Rules
Facts (para 2–5)
The petitioner, an importer of seashells for handicraft purposes, filed a writ petition challenging an assessment order dated 15.02.2025 issued under GSTIN 33CPTPM3703G1ZU. The order was based on discrepancies between GSTR-2A and GSTR-3B. The petitioner argued that IGST paid on imports is self-assessed and appears only in GSTR-3B, not in GSTR-2A, since there is no supplier uploading data. Despite this, the assessing officer proceeded to confirm demand without affording a meaningful personal hearing, though a show cause notice dated 22.11.2024 was referred to in the order.
Questions Before the Court (para 2–4)
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Whether the denial of IGST input tax credit solely on the ground of non-reflection in GSTR-2A is sustainable?
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Whether the assessment order passed without adequate opportunity of personal hearing is valid in law?
Observations (para 6–9)
The Court observed that the mismatch between GSTR-2A and GSTR-3B cannot by itself be a ground to deny credit when IGST is paid on imports. It relied upon the precedent in Xavier Timber v. State Tax Officer (2024) 164 taxmann.com 425 (Madras), where it was held that IGST credit on imports cannot auto-populate in GSTR-2A and denial on that ground is unsustainable. The Court emphasized that natural justice requires proper opportunity to file a reply and be heard. The petitioner had already faced partial recovery, further justifying a fresh opportunity.
Judgement (para 7–10)
The High Court quashed the impugned assessment order dated 15.02.2025 and remanded the matter back to the State Tax Officer. The petitioner was directed to file a reply to the original show cause notice within 30 days, and the respondent was instructed to pass a fresh order on merits within three months thereafter. The Court clarified that failure to respond would be deemed as dismissal of the writ petition. The order also mandated consideration of Xavier Timber while re-deciding.
Table: Case referred
| Case | Court | Citation | Verdict |
|---|---|---|---|
| Xavier Timber v. State Tax Officer | Madras High Court | (2024) 164 taxmann.com 425 | Denial of IGST credit for imports on ground of non-reflection in GSTR-2A was held invalid; order quashed and remanded for fresh decision with opportunity of hearing. |
Between Fine Lines
For businesses involved in imports, IGST paid at customs cannot appear in GSTR-2A as there is no supplier uploading invoices. The Court reaffirmed that ITC cannot be denied merely for this reason. Taxpayers must, however, respond promptly to show cause notices and substantiate IGST payment through challans or bills of entry. This judgment protects importers from mechanical denial of ITC and reinforces the importance of following principles of natural justice in GST adjudication.
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