JAYASHREE ENTERPRISES v. ASSISTANT COMMISSIONER (ST)

Introduction

The petitioner challenged the assessment order dated 12.02.2025, primarily disputing the levy of interest on alleged wrongful availment and utilisation of Input Tax Credit (ITC). The dispute arose because the ITC claimed by the petitioner in GSTR-3B exceeded the ITC reflected in GSTR-2A, leading the Department to conclude that the petitioner had availed and utilised ITC to which it was not entitled.

The petitioner argued that a mere mismatch between GSTR-3B and GSTR-2A could not automatically be treated as wrongful availment of ITC. It was further contended that interest under Section 50(1) is payable only on the portion of tax discharged through the electronic cash ledger, whereas the disputed liability had been discharged through the electronic credit ledger. The petitioner also relied upon the CBIC Circular dated 18.09.2020 and the Madras High Court decision in M/s. Maansarovar Motors Private Limited, to contend that no interest was leviable.