Adjustment of ITC appearing in one GSTN when two GSTN allotted – demand quashed

Adjustment of ITC appearing in second GSTN  when two GSTN allotted – Hon’ble High Court directs fresh order to be passed.

In a recent judgment, the Hon’ble Allahabad High Court has quashed the GST demand and directed GST authorities to pass a fresh order allowing adjustment of ITC appearing in second GSTN  when two GSTN were allotted to the assessee.

ABCAUS Case Law Citation:
4256 (2024) (09) abcaus.in HC

In the instant case, the assessee/Petitioner had filed a Writ Petition. The Petitioner was aggrieved by the action of the UP GST Authorities in not adjusting the ITC appearing in GSTR-2A.

The petitioner company was engaged in supply of trucks and was also operating an Authorised Service Station for servicing of trucks and supply of parts, components and accessories.

Just Prior to the enforcement of GST regime, the petitioner was having VAT Registration. Thereafter one GSTIN was issued by the GST Authorities. Simultaneously, in respect of servicing activity, the petitioner was issued another GSTIN. The petitioner was issued third GSTIN which was subsequently cancelled by GST Authorities.

Since two GSTIN were issued against one single PAN, hence the petitioner by writing brought the same into the knowledge of the State GST authority and requested for redressal of the problem. However, no immediate action was taken.

As prior to the date of enforcement of GST regime, the petitioner was approaching and the State GST authorities failed to take any action in respect of two GSTIN, hence the petitioner communicated both the GSTIN to its suppliers so that the supply of goods may not get interrupted. At the same time, since the portal of second GSTIN was become inaccessible, hence the petitioner furnished returns in GSTR-3B against first GSTIN wherein the petitioner disclosed all the supplies and also claimed ITC arising on such supplies.

In the meanwhile, the petitioner again requested the GST authorities to cancel one GSTIN and adjust the ITC taken against the GSTIN to be cancelled to another GSTIN. On the request so made, the GST Authorities  forwarded the petitioner’s grievance vide email to info.up.gst@gmail.com pointing out that two GSTIN are running simultaneously against one PAN, the petitioner. However, the grievance was not resolved.

With effect from April 1, 2018, e-way bill prescribed under Rule 138 of the Central Goods and Services Tax, Rules was made mandatory. At the time of first transaction of purchase of vehicle the concerned employee of vehicle manufacturer could not generate eway bill by using second GSTIN, the portal did not allow generation of e-way bill. The Petitioner made enquiries from the State jurisdictional authorities whereupon the petitioner was advised to generate e-way bill by using the first GSTIN. Acting on such advice, the petitioner started generating e-way bills on first GSTIN and also communicated all suppliers to issue tax invoice against first GSTIN. Thus, from May 14, 2018 onwards the suppliers supplied goods to the petitioner against the first GSTIN only.

Later, on the basis of audit objection, the Superintendent GST issued letter alleging ITC availed in excess. In reply, the petitioner stated the circumstances in which purchases prior to May 14, 2018 were booked under first GSTIN whereas the returns were filed and ITC was availed under second GSTIN. The petitioner was then served with DRC-01A directing the petitioner to pay the amount of excess ITC along with interest under Section 50 of the CGST Act and penalty under Section 122 of the CGST Act, failing which show cause notice shall be issued under Section 73(1) of the CGST Act.

Since despite the earlier emails and the later representations, no action was taken by the respondents to remedy the situation, the petitioner approached High Court for adjustment of ITC by filing the present writ petition.

During the pendency of the writ petition, show cause notice and the impugned order was passed for demand and recovery.

Before the Hon’ble High Court, the Petitioner submitted that CBIC vide Circular No.183/15/2022-GST has directed the field officers to allow the benefit of ITC, even if the suppliers have declared supply with wrong GSTIN of the recipient. It was submitted that the case of the petitioner was on a higher footing, as the supplier had declared supply with correct GSTIN of the recipient of the petitioner, but since two GSTIN were issued to the petitioner, hence the ITC appearing in another GSTIN is liable to be adjusted.

The Petitioner also relied upon the judgment of the Co-ordinate Bench of the Court where applying the aforesaid Circular the Hon’ble High Court had set aside the orders under challenge and directed the authorities to pass a fresh order after complying with the procedure specified in the aforesaid Circular.

In light of the above, the impugned order was quashed and set aside with a direction to Joint Commissioner to pass a fresh order in terms of the said Circular.

Download Full Judgment Click Here >>

• Empanelment of ICAI Exam observer for January 2027 Examinations. Last date: 20.11.2026
• No arrest under GST- Major decision of 57th Meeting of GST Council held on 8th October 2026
• Later SC ruling cannot render an act done in compliance of a court order a statutory default
• Interest payment on mobilisation advance to NHAI not liable to TDS u/s 194A
• Typographical error in turnover accepted during assessment not a mistake apparent from record