Provisional Relief Granted in ITC Mismatch Dispute Based on Prima Facie Case

Court: High Court of Kerala
Case Title: U.S. Technology International Pvt. Ltd. v. State of Kerala
Petition Number: WP(C) No. 14760 of 2025
Category of Dispute: Input Tax Credit
Order Date: 08 April 2025
Relevant Section: Section 112 of CGST Act, 2017
Bench: Hon’ble Mr. Justice Bechu Kurian Thomas

Facts of the Case (Para 1 of Order; P1–P18 of Petition)

• The petitioner, U.S. Technology International Pvt. Ltd., filed its GSTR-9 for FY 2018–19 on 16.12.2020 and faced a mismatch issue in Table 8C related to ITC (Exhibit P1, P13).

• The department issued multiple reminders and a Show Cause Notice (SCN) dated 30.01.2024 alleging excess availment of credit (Exhibits P3–P8).

• Despite a rectification request (Exhibit P9), the Deputy Commissioner passed an adverse Order-in-Original on 25.03.2024 (Exhibit P8), later reiterated by a rejection of rectification on 15.04.2024 (Exhibit P11).

• The petitioner filed an appeal along with supporting evidence showing duplication and reconciliation of ITC (Exhibits P13–P16), but the appellate authority dismissed the appeal vide order dated 02.12.2024 (Exhibit P17).

• Aggrieved, the petitioner filed the present writ challenging the impugned order and sought stay on coercive recovery.

Questions in Consideration (Para 1-2)

• Whether coercive steps could be initiated in execution of the disputed appellate order while the writ petition was pending?

• Whether the petitioner had made a prima facie case for grant of interim relief?

Observation of the Court (Para 2)

• The Court noted that the learned Government Pleader had taken notice and sought instructions.

• Considering the nature of the dispute and supporting documentation already placed on record, the Court directed that coercive proceedings pursuant to the Order-in-Original (Exhibit P8) be kept in abeyance.

Judgment of the Court (Para 2)

• The High Court ordered that no coercive action shall be taken for a period of three months from the date of order (i.e., till 08.07.2025).

• The matter was posted for next hearing on 26.06.2025.

Between Fine Lines

• Taxpayers can obtain interim protection from coercive action if a strong prima facie case is made.

• Procedural diligence (filing rectifications, appeals, supporting documents) aids in convincing the court.

• ITC duplication in GSTR-9 requires meticulous reconciliation to avoid penal consequences.

• Coercive recovery can be restrained even after appellate rejection if higher judicial review is pending.

• Interim relief under writ jurisdiction is a safeguard against unjustified tax enforcement.

Summary of Referred Cases

(None specifically cited in the judgment; only commentary by Bimal Jain referenced in Exhibit P2)

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