ITC denial for IGST non-reflection in Form GSTR-2A challenged; Karnataka HC grants interim-relief

Karnataka HC grants interim-stay of order disallowing Input Tax Credit (ITC) w.r.t. IGST on import to the tune of Rs. 3.5 crores (approx.) with interest and penalty for July 2017 to March 2020 on the sole technical ground that ITC claimed by Petitioner as per Form GSTR-3B is in excess of ITC available in terms of Form GSTR-2A; Writ petition has been filed asserting that denial of ITC for the period prior to amendment in FORM GSTR-2A vide Notification No. 79/2020, on the ground that there is no corresponding ITC of IGST reflecting in auto-populated GSTR-2A is illegal, unjust and erroneous; Being eligible to ITC on the basis of IGST paid at the time of filing the bills of entry (BoE) for the year FY 2017-18 and FY 2019-20, assessee filed GSTR-3B, however, Revenue sought to deny ITC to assessee on account of the IGST not reflecting in Form GSTR-2A; Petitioner submits that it cannot to be made liable for an act that cannot be possibly performed by it, a position of law that has been consistently reiterated by several Courts, and denying the ITC, otherwise allowable, in absence of a system reconciliation mechanism vitiates the scheme and object of the Act; Assessee stresses on its entitlement to the substantive benefit of taking ITC by submitting that due to absence of a technical facility, it cannot be denied ITC as mismatch arose  not because of its default but for a deficiency in reconciliation system; Further, assessee claims that solely because the amounts are not reflected in Form GSTR-2A, more so, when mechanism for  auto populated the details of imports was not effective, denial of ITC on this basis is unjust and arbitrary despite the BoE undisputedly being filed and IGST being paid on the import of goods; On validity of the demand order, assessee states that order is violative of principles of natural justice and bad in law, since it was not preceded by an intimation in Form GST DRC-01A in terms of Rule 142 of the CGST Rules; As an interim measure, assessee sought for stay of order for tax periods July 2017 to March 2020; HC issues notice and lists the matter on December 8: Karnataka HC