Demand Issued on Ground of Non-payment of Tax by Supplier Can’t Sustain Since Recipient Was Composition Dealer | HC
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- Last Updated on 10 November, 2023
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Case Details: Rama Brick Field v. Additional Commissioner, Grade-2 - [2023] 156 taxmann.com 252 (Allahabad)
Judiciary and Counsel Details
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- Piyush Agrawal, J.
- Suyash Agarwal for the Petitioner.
- C.S.C. for the Respondent.
Facts of the Case
In the present case, the petitioner who had opted for composition scheme for the period of 1-10-2017 to 21-3-2019 received a notice from the GST department. It was alleged that one of its supplier was found non-existent at the time of survey and demand of tax along with interest and penalty was raised. It filed writ petition against the demand and contended that no input tax credit was availed since it had opted for composition scheme.
High Court Held
The Honorable High Court noted that the disputed purchases pertained to period May, 2018 to June, 2018, which fell under the period of composition and question of taking credit would not arise. Moreover, the petitioner adduced evidence such as tax invoice, e-way bill, G.R., payment receipts etc. to show that purchases were made from registered dealer whose registration was cancelled in October, 2019.
Also, it was noted that at time of transaction in question, seller was a registered firm under GST Act and at subsequent time, the seller was found non-existence. Thus, the Court held that the impugned order raising demand for entire amount of tax could not be sustained in eyes of law and matter was remanded back.
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