Decided 16 October 2026. The Ernakulam Bench of GSTAT has set aside an ITC demand of ₹13,97,613 raised by comparing GSTR-2A and GSTR-3B head-wise. Following the Kerala High Court, it held that when the overall credit is considered, surplus IGST credit offsets any shortfall in CGST and SGST, so there was no excess availment. The order was also void because no personal hearing was given.
Case at a glance
| Case | Sansco Technologies (Kerala) Pvt. Ltd. v. Commissioner of State Tax |
| Forum | GSTAT, Ernakulam Bench (Shri Subramanya Rayaprol, Vice-President, and Shri Ramamoorthi Sriram, Member (Technical)) |
| Appeal No. | APL/26/ERN/2026; Final Order No. 14/EKM/KERALAM/2026 |
| Date of order | 16 October 2026 |
| Period | FY 2017-18 |
| Demand | Excess ITC ₹13,97,613 under section 73 |
| Result | Appeal allowed with consequential relief |
Facts of the case
The appellant is a super distributor of mobile phones in Kerala. A section 73 SCN dated 22.07.2023 alleged excess ITC of ₹13,97,613 for FY 2017-18 on a head-wise comparison of GSTR-2A with GSTR-3B.
The demand was confirmed on 14.12.2023 without a personal hearing, and the first appellate authority dismissed the appeal without dealing with the appellant's contentions.
Issue before the Tribunal
Should an ITC mismatch be computed head-wise (IGST, CGST, SGST separately) or on an overall basis? And is an order passed without personal hearing valid?
What the Tribunal held
- Following the Kerala High Court in Rejimon Padickapparambil Alex and later decisions such as TRM Associates and Win Auto Sales, wrong reporting of credit between heads in GSTR-3B is a technical error, not wrong availment.
- On an overall basis, the CGST shortfall (₹1,37,242) and SGST shortfall (₹1,36,453) were more than covered by surplus IGST credit of ₹48,22,560, so no tax was short paid.
- An order passed without giving a personal hearing breaches section 73 and natural justice; it is a jurisdictional defect not cured by the availability of an appeal.
- The first appellate order was non-speaking and mechanical. Contentions about section 16(2)(c) and section 155 were outside the SCN and could not be raised for the first time.
Practical takeaways for taxpayers
- When replying to a GSTR-2A vs 3B mismatch notice, present the overall ITC position across IGST, CGST and SGST with a reconciliation.
- Rely on Rejimon Padickapparambil Alex (Kerala HC) where credit was reported under the wrong head.
- Always request a personal hearing in writing; an order without it is liable to be set aside.
- The department cannot expand the case beyond the SCN at the appeal stage.
Frequently asked questions
Can excess IGST credit cover a shortfall in CGST/SGST credit?
GSTAT Ernakulam, following the Kerala High Court, held that the overall credit position matters and head-wise errors without revenue loss do not justify a demand.
Is a personal hearing mandatory before a GST demand order?
Yes. The Tribunal held an order without hearing to be void.
Facing a similar GST dispute?
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This summary is based on the order of the GST Appellate Tribunal, Ernakulam Bench in Appeal No. APL/26/ERN/2026. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.