Sikkim HC quashed recovery of ₹37.93L budgetary support, citing failure to consider GSTR-2A as evidence of eligible ITC.
Sikkim HC Quashes Recovery Over ITC Non-Consideration
The Sikkim High Court set aside the recovery of ₹37.93 lakh in alleged budgetary support, holding that the department failed to consider documentary evidence of input tax credit (ITC) submitted via GSTR-2A. The taxpayer had demonstrated that the amount was utilised through legitimate ITC claims.
The Court directed the concerned authority to conduct a fresh examination of the GSTR-2A data, supplier-wise ITC eligibility, and underlying invoices within two months. It observed that mechanical recovery without verification of ITC documentation violates procedural fairness.
The GSTR-2A return is admissible as evidence under GST and must be considered before initiating recovery proceedings, especially in cases involving ITC utilisation.
This decision reinforces evidentiary standards in recovery actions. Practitioners should ensure timely submission of GSTR-2A reconciliation matrices and invoke this ruling when facing summary recovery notices.
