Writ Petition Challenging ITC Disallowance Dismissed Due

Writ Petition Challenging ITC Disallowance Dismissed Due to Inordinate Delay and Failure to Respond to Statutory Notices

Issue

Whether a writ petition under Article 226 challenging a GST assessment order under Section 73 disallowing ITC due to GSTR-3B and GSTR-2A mismatches is maintainable when the assessee repeatedly failed to respond to statutory notices and delayed filing the writ petition by over two and a half years after obtaining supplier certificates.

Facts

Period of Dispute: The matter pertains to Financial Year 2017-2018.
Issuance of ASMT-10 & SCN: The Revenue issued a notice in Form ASMT-10 pointing out discrepancies between GSTR-3B and GSTR-2A. Although the petitioner sought one month’s time to reply, no response was submitted. Subsequently, a Show Cause Notice under Section 73 was issued, which also went unresponded.
Demand Order: The Assessing Officer passed an order under Section 73 confirming the demand on account of excess ITC claimed.
Assessee’s Contention: The petitioner claimed that it had paid tax to the suppliers, but the discrepancies occurred because the suppliers failed to upload transaction details in time.
Obtaining Supplier Certificates: The petitioner subsequently obtained certificates from its suppliers in August 2023 certifying that tax had been paid on the relevant transactions, and sought an opportunity to present these before the authority.
Delay in Seeking Remedy: Despite obtaining the supplier certificates in August 2023, the petitioner filed the writ petition after an inordinate delay of nearly two and a half years.

Decision

The court observed serious lapses on the part of the petitioner in failing to reply to statutory notices and in not furnishing invoice details during original assessment proceedings.
The gross, unexplained delay of about two and a half years in approaching the High Court after receiving the supplier certificates, coupled with the finality reached in the assessment order, barred the exercise of extraordinary writ jurisdiction under Article 226.
The writ petition was accordingly dismissed.
The issue was decided in favour of the revenue.

Key Takeaways

Discretionary Nature of Writ Jurisdiction: Article 226 is an extraordinary remedy; courts will refuse relief to taxpayers who display gross laches, unexcused delays, or negligence in prosecuting their claims.
Duty to Respond to Statutory Notices: Assessees cannot ignore administrative proceedings (such as ASMT-10 or Section 73 SCNs) and later seek to introduce fresh evidence (like supplier certificates) via writ petitions after assessment orders have attained finality.
Finality of Assessment Orders: Belated attempts to challenge finalized demand orders based on subsequently procured supplier certificates will not be entertained if the taxpayer failed to act within reasonable timeframes.

HIGH COURT OF KERALA

Meethal Thotty Ahamedali

State Tax Officer

ZIYAD RAHMAN A.A., J.

WP (C) NO. 9901 OF 2026

MARCH 17, 2026

Smt. K. Krishna, Achyuth Menon and Smt. Anna Anto, Advs. for the Petitioner. Smt. Reshmitha R. Chandran, Sr. G.P. and P. Anirudhan, Adv. for the Respondent.

JUDGMENT

1. The petitioner is an assessee under the CGST/SGST Act. The reliefs sought by the petitioner are as follows:

“(i)

To quash Ext. P4 order issued by the 1st respondent by the issue of a writ of certiorari or such other writ or order or direction.

(ii)

To grant the petitioner such other incidental reliefs including the costs of these proceedings.”

2. The facts that led to filing of this writ petition are as follows: In respect of the assessment year 2017-2018, a notice in FORM GST ASMT-10 was issued to the petitioner on 26.06.2020, pointing out certain discrepancies in the returns filed by the petitioner. One of the main discrepancies highlighted in Ext.P1 was the difference between the figures in FORM GSTR-3B and FORM GSTR-2A and thus it was alleged that the petitioner had availed excess Input Tax Credit. The petitioner sought one month’s time to file a reply to the same as per Ext.P2. Later, Ext.P3 show cause notice dated 17.09.2021 was issued to the petitioner in this regard, and thereafter, Ext.P4 order was passed under Section 73 (9) of the CGST Act, demanding an amount of Rs.2,89,932/-towards the excess Input Tax Credit claimed.

3. According to the petitioner, the petitioner had paid the tax in respect of all the said transactions, but since the supplier who had collected the tax from the petitioner along with the value of the supply, failed to upload the necessary details regarding the payment with the statutory authorities, the discrepancies highlighted in the order issued against the petitioner have occurred. It is also the case of the petitioner that, subsequently, the petitioner managed to obtain Exts.P5 to P11 certificates from the suppliers, where, it is certified by the respective suppliers that, they have paid the tax in respect of the transactions and the details of payments are also specified in the said certificates. Therefore, the petitioner is seeking an opportunity to get the aforesaid certificate considered, and to enable the statutory authorities to do so, Ext.P4 order passed by the 1^st respondent is challenged. The petitioner is placing reliance upon Ext.P12 and the judgment rendered by this Court in W.P.(C) No.45135/2025 where, this Court, taking note of the observations made in M. Trade Links v. Union of India 87 GSTL 4 (Kerala)/[2024 KLT OnLine 1624], permitted the petitioners therein, to have a further opportunity, even though the certificates were obtained from the suppliers belatedly.

4. I have heard, Smt. Krishna K, the learned counsel for the petitioner and Smt. Reshmitha R Chandran, the learned Government Pleader for the respondents.

5. When the learned counsel for the petitioner reiterates the above contentions, the learned Government Pleader seriously opposes the same, by pointing out the serious lapses on the part of the petitioner in pursuing the remedies available to the petitioner. It is pointed out that, even though a notice in FORM GST ASMT-10 was issued as early as on 26.06.2020, apart from seeking one month’s time to furnish a reply to the same, no other steps have been taken. No reply was also submitted. Thereafter, the show cause notice as evidenced by Ext.P3 was issued after one year thereof, that was on 17.09.2021 and to that show cause notice also, no proper reply was given and the details of the invoices were not furnished.

6. It was further pointed out by the learned Government Pleader that, even the certificates relied on by the petitioner as evidenced by Ext.P6 to P11 were issued during the month of August 2023, but the petitioner has approached this Court only now, i.e., after more than 2½ years. The learned Government Pleader also placed reliance upon the observations made by a Division Bench of this Court in Nahasshukoor v. Assistant Commissioner [2024] 81 GSTL 384 (Kerala) = W.A. No. 1853/2023, where this Court, by referring to the statutory stipulations contained in Sub Rule (4) Rule 36 of CGST Rules, observed that, it is the obligation of the taxpayer to furnish the details within the period stipulated therein which is 90 days. The learned counsel for the petitioner submits that the decision in Nahas Shukoor’s case cannot be made applicable to the facts and circumstances of this case.

7. After carefully going through the records and considering the contentions raised by both sides, I find no merits in the contentions raised by the petitioner. This is particularly because, there are serious lapses on the part of the petitioner in pursuing the matter. As rightly pointed out by the learned Government Pleader, none of the notices issued to the petitioner were properly replied and the details of the invoices based on which these transactions were made were also not furnished. Besides, Ext.P5 to P11 certificates were evidently received by the petitioner as early as in the month of August 2023, but no action was taken in respect of the same, by seeking the relief sought in this writ petition immediately after receipt of the same. This writ petition is submitted on 10.03.2026 which is almost after 2½ years of receipt of Ext.P5 to P11 notices. Moreover, the assessment pertains to the year 2017-2018. As far as the decision relied on by the petitioner is concerned, the same cannot be made applicable to the facts and circumstances of this case, on account of the gross delay and lapses on the part of the petitioner, in pursuing the remedies which are already highlighted above.

8. Thus, when all these aspects are taken into account, I do not find any justifiable reason, to invoke the powers of this Court under Article 226 of the Constitution of India, on account of the delay and lapses on the part of the petitioner in pursuing the remedies. The fact that the petitioner kept Ext.P5 to P11 documents with himself, without invoking the remedies available to the petitioner, is one of the crucial aspects that prompts this Court to arrive at the conclusion not to interfere in the proceedings, which, otherwise have attained a finality, being an order passed on 16.11.2022.

In such circumstances, I do not find any justifiable reason to entertain this writ petition and accordingly, this writ petition is dismissed.