Facts of the Case:

In this case, the appellant was subjected to scrutiny of its returns for FY 2020-21. The department noticed excess availment of ITC of ₹5,62,067 (IGST ₹68,573, CGST ₹2,46,747 and SGST ₹2,46,747) in GSTR-3B for December 2020, as compared with the ITC reflected in GSTR-2A. Proceedings under Section 73 were initiated and the Appellant subsequently paid the disputed ITC through DRC-03 on 09.01.2025, while disputing the consequential interest and penalty.

The Appellant contended that the disputed ITC actually related to debit notes pertaining to FY 2018-19, which had been reported subsequently in December 2020 because of accounting/return filing limitations. It therefore claimed that the demand should be treated as pertaining to the period covered by Section 128A, i.e. 1 July 2017 to 31 March 2020, thereby entitling it to waiver of interest and penalty. The First Appellate Authority rejected the contention on the ground that the appellate proceedings could not travel beyond the tax period involved in the original order.

Issue:

Whether excess ITC of ₹5,62,067 claimed in GSTR-3B for December 2020 could be treated as a liability pertaining to FY 2018-19, merely because the Appellant claimed that the underlying debit notes originated in FY 2018-19, so as to avail waiver of interest and penalty under Section 128A of the CGST/KGST Acts?

Held That:

The GSTAT dismissed the appeal and upheld the interest and penalty. It held that eligibility under Section 128A depends upon the statutory requirement that the demand itself pertains to the period from 1 July 2017 to 31 March 2020. The mere fact that the underlying debit notes were allegedly issued in FY 2018-19 could not bring the demand within the scope of the amnesty scheme when the disputed ITC was actually availed for the first time in GSTR-3B for December 2020.

On examination of GSTR-1, GSTR-3B and GSTR-9, the Tribunal found that the excess ITC forming the subject matter of the Section 73 proceedings was claimed in December 2020 and was not ITC originally availed in FY 2018-19 and subsequently carried forward. Consequently, the demand was held to pertain to December 2020, falling outside the temporal scope of Section 128A.

The Tribunal further held that CBIC Circular No. 238/32/2024-GST could not enlarge the statutory period prescribed under Section 128A. The reliance on Wipro Ltd. was also found distinguishable, as that decision concerned reconciliation of ITC mismatch and not the statutory eligibility conditions under Section 128A. Similarly, the Tribunal rejected the Appellant’s reliance on Samita Panda, observing that the statutory requirement regarding the eligible period could not be dispensed with merely on procedural or technical considerations.

Importantly, the Tribunal also noted that the Appellant had not filed Form SPL-01 to claim the Section 128A benefit and it was not a case where such an application had been filed and rejected by the authorities.

Accordingly, the Tribunal concluded that the Appellant failed to establish that the disputed demand pertained to the period 1 July 2017 to 31 March 2020. The waiver of interest and penalty under Section 128A was therefore denied, and the appeal was dismissed.

Key takeaway – For Section 128A amnesty, the relevant consideration is the period to which the demand actually pertains, and not merely the vintage of the underlying transaction or debit note. Where excess ITC is found to have been availed for the first time in December 2020, the resulting Section 73 demand cannot be brought within the Section 128A window by contending that the underlying transaction originated in FY 2018-19.

Case Name: Rodman Technologies (P.) Ltd. v. Commissioner of Karnataka State GST, Bengaluru dated 25.08.2026

Citation No. 2026 Taxo.online 2590