Challenges:
- Excess ITC Claim Discrepancy
- Notice Issued Under Section 73
- Penalty Imposed
- Clerical Errors in Returns
- Reversal of ITC & Compliance
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M/S Kailash Industries, a registered GST entity (GSTIN: engaged in the trading of wire mesh and related products, filed an appeal against a tax assessment order issued on August 20, 2024 by the Deputy Commissioner, State Tax, Ghaziabad (Sector-17).
The assessment order was passed under Section 73 of the UPGST Act, 2017 due to discrepancies in the Input Tax Credit (ITC) claims reported in GSTR-3B compared to the auto-populated GSTR-2A.
The appellate authority reviewed the case of M/S Kailash Industries and found that the discrepancies in the ITC claim for FY 2019-20 were rectified through GSTR-9 and tax payments via DRC-03 on 03.01.2025. The minor variations were considered clerical errors rather than deliberate tax evasion.
Considering that the appellant had already reversed the ITC and settled the tax liability, the penalty imposed under Section 73 of the UP GST Act, 2017, was revoked. The appeal was partially allowed, upholding the tax demand but canceling the penalty.