Gauhati High Court Rebalances GST Compliance in GSTR-1 Mismatch and ITC Denial

In a significant ruling, the Gauhati High Court has emphasized that GST compliance cannot be reduced to a rigid, system-driven exercise at the cost of substantive justice. 

The Court held that mismatch between GSTR-1 and GSTR-3B cannot automatically trigger recovery as “self-assessed tax” without affording the taxpayer an opportunity to explain. 

Further, it upheld the retrospective application of Section 16(5), thereby allowing ITC claims previously denied on limitation grounds. 

The decision reinforces that procedural lapses and human errors must be adjudicated with fairness, not mechanical enforcement.