The Goods and Services Tax Appellate Tribunal, Bengaluru Bench, in M/s Peekay Industries v. Commissioner of Commercial Taxes, Karnataka, APL/34/BUR/2026, has set aside the adjudication and appellate orders concerning an Input Tax Credit dispute for FY 2019-20 and remanded the matter for fresh adjudication. The order was pronounced on 3 September 2026.
The proceedings originated from a difference between ITC availed in FORM GSTR-3B and ITC reflected in FORM GSTR-2A. While the original notices proposed an alleged excess ITC of ₹82,701 under IGST, the adjudication order ultimately confirmed tax of ₹51,174 under CGST and SGST, along with interest and penalty. The Tribunal found that this shift in the tax heads had not been properly explained or supported by the reconciliation on record.
The Tribunal observed that a GSTR-2A/GSTR-3B mismatch may constitute a valid basis for scrutiny and verification, but such mismatch, without examination of the underlying transactions, cannot automatically be treated as conclusive proof that ITC was wrongly availed. It further noted that Section 16(2)(aa) was introduced only with effect from 1 January 2022 and was therefore not applicable to FY 2019-20.
The Tribunal also held that the applicable CBIC circulars had to be considered according to their respective periods of operation. The authorities were directed to separately examine the relevant periods, reconcile the conflicting computations, verify invoices and supplier details where necessary, and examine the books of account, purchase register and electronic credit ledger.
Accordingly, the adjudication order dated 30 July 2024 and the Order-in-Appeal dated 15 November 2025 were set aside. The matter was remanded for fresh adjudication strictly within the scope of the original show-cause notice, after granting the appellant an effective opportunity of hearing. The fresh order is to be passed within twelve weeks from communication of the Tribunal’s order.
Key Takeaway
A difference between GSTR-2A and GSTR-3B can trigger verification, but ITC cannot be denied solely on the basis of the mismatch without proper factual examination of the underlying transactions and records.
