Kerala HC: Overturns tax-credit disallowance for return mismatch recognizing small dealer’s initial GST implementation challenges – in the case of Anaz Abdul Rahiman Kutty

Kerala HC rules on GST implementation challenges during initial stages faced by small dealers and consequently, sets aside order disallowing input tax credit (ITC) for GSTR 2A -3B mismatch; Discrepancies were noticed in assessee’s GSTR-3B and so considering the difference between GSTR-2A and 3B, Assessing Authority passed DRC-01 disallowing ITC as well as levied interest of Rs. 1 lakh approximately under CGST and SGST with penalty; Assessee contends that due to the initial period of the implementation of the GST regime, assessee and other small dealers were facing a lot of difficulty; Court concurs to this submission noting that “period involved is 2017-18 when the GST regime was rolled out…. petitioner faced enormous difficulty in understanding the provisions of the GST Act”; In this context, Court also notes that Government is not at a loss since tax has been paid and directs assessee to appear before the State Tax Officerwith all the relevant documents in his possession to support his claim for ITC; Accordingly, instructs the State Tax Officer to pass a fresh order and disposes writ petition.