GST Demand of Rs. 16.67Cr Mechanically Confirmed on Mismatch in ITC Claim: Madras HC Quashes Order...

The Madras High Court has quashed a GST demand order, criticizing the tax officer for "mechanically" confirming the demand based on a mismatch in the Input Tax Credit (ITC) claimed. The court found that the officer had passed the order without properly considering the explanation and documents submitted by the taxpayer. The order was based solely on the difference between the ITC claimed in the GSTR-3B return and the credit appearing in the GSTR-2A statement. The High Court held that such a mechanical approach, without an application of mind to the assessee's reply, is a violation of the principles of natural justice. It remanded the case back to the officer for a fresh adjudication, with a clear direction to consider all the evidence provided by the taxpayer before passing a reasoned order.