In Agrico Organics Ltd. v. Commissioner of Commercial Taxes, Karnataka, the GSTAT Bengaluru held that an ITC mismatch between GSTR-3B and GSTR-2A alone could not sustain a demand for FY 2017–18, where the difference arose from credit notes incorrectly reported as ITC without causing revenue loss.
The Tribunal set aside the tax demand of ₹4,47,796, interest of ₹4,63,468 and penalty of ₹44,780, holding that the reporting error did not make the amount payable and that the Revenue could not introduce new grounds beyond the show cause notice.