The Rajasthan High Court in the case Hindustan Unilever Limited Versus Union of India observed and has asked for suggestions from the authorities with respect to a mechanism for matching a credit note of supplier with input tax credit, ITC reversal. The bench comprising of Justice Manindra Mohan Shrivastava and Justice Praveer Bhatnagar in the case observed and has found that in the absence of any statutory obligation cast on the respondent in order to undertake a matching exercise if the petitioner is willing to claim a reduction in the tax liability and the proof of reversal by the recipient is to be provided by the supplier in the said matter.
In the present case, the petitioner or assessee raised an issue with regards to the absence of a proper mechanism for matching the credit note of the supplier with the ITC reversal by the recipient. It is being appeared before the court that there was a provision as stated under section 43 of the CGST Act or RGST Act obligating the matching exercises to be undertaken by the department. Thus, the said provision was later being omitted.It has also been submitted by the petitioner in the plea that it is not practically possible in the case for the petitioner to submit a certificate after obtaining the same from the recipient as the proof of reversal of credit by the recipient in order to avail of a reduction in tax liability.
Therefore, it being for the department in order to undertake the matching exercise, and the claim of reduction in tax liability should not be made by the dependent upon the production of any certificate or proof of reversal of ITC by the recipient. The court in the case observed and has stated that though this court is not granting any interim order at this stage, learned counsel for the Union of India is directed to place before the Court the appropriate suggested mechanism. Accordingly, the court listed the matter for further consideration on October 05, 2023. The counsel, Sanjeev Nair appeared for the petitioner. The counsel, Devesh Yadav represented the respondent.