Benefit of ITC Allowed Based on GST Circular – Writ Petition Disposed

Case Title: M/s. Vasavi Agencies v. Assistant Commissioner – Central Tax & Others
Court: High Court of Andhra Pradesh, Amaravati
Petition No.: WP No. 12984 of 2024
Date of Judgement: 05.12.2024
Category of Dispute: Input Tax Credit (ITC) – Rectification/Denial of Credit
Relevant Sections: Sections 16(2), 16(4), 59, 73, 108, 122(2)(a), 160(2), 161 of CGST/APGST Act, Section 20 of IGST Act, Rule 61 of APGST Rules

Facts of the Case (Ref: Paras 1–3)

1. The petitioner (M/s. Vasavi Agencies) challenged denial of rectification on GST common portal and the issuance of DRC-07 without proper service of SCN (para 1).

2. Petitioner argued that demand of IGST in Andhra Pradesh instead of Karnataka was contrary to Section 20 of IGST Act and penalty under Section 73 was arbitrary (para 1).

3. The petitioner also questioned retrospective amendment to Rule 61 of APGST Rules, validity of GSTR-3B, and restrictions under Section 16(4) as being ultra vires and unconstitutional (para 1).

Question(s) in Consideration (Ref: Para 1)

1. Whether denial of rectification and issuance of DRC-07 without service of SCN is valid under GST law.

2. Whether ITC can be denied on procedural grounds, despite fulfilment of substantive conditions under Section 16(2).

3. Whether retrospective amendment of Rule 61 and restrictions under Section 16(4) are ultra vires and unconstitutional.

4. Whether petitioner is entitled to ITC in terms of latest CBIC Circular.

Observation of Court (Ref: Para 2)

1. Counsel for respondents conceded that petitioner is entitled to ITC under CGST Act in terms of Circular No. 237/31/2024-GST, subject to conditions therein (para 2).

2. The Court noted that the petitioner’s challenge survives only to the extent of recognition of ITC entitlement under the said circular (para 2).

Judgement of the Court (Ref: Para 2–3)

1. The High Court disposed of the writ petition holding that the petitioner is entitled to ITC benefit under Circular No. 237/31/2024-GST, subject to fulfilment of prescribed procedure (para 2).

2. Liberty was given to petitioner to approach Court again if any cause survives (para 2).

3. Writ petition disposed without costs (para 3).

Between Fine Lines

• The Court recognized the petitioner’s right to ITC.

• ITC cannot be denied merely due to portal glitches or procedural lapses.

• Benefit of CBIC Circular No. 237/31/2024-GST was extended.

• Constitutional challenges to Rule 61 and Section 16(4) were not examined in detail.

• Relief granted was limited to recognition of ITC entitlement, subject to compliance with circular conditions.

Summary of Referred Cases

The judgment itself did not explicitly cite other judicial precedents. Relief was primarily based on the CBIC Circular No. 237/31/2024-GST and concession by revenue counsel.

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