ITC Can’t be Denied Because Registration of Supplier was Cancelled with Retrospective Effect: HC

Case Details: Gargo Traders v. Joint Commissioner, Commercial Taxes (State Tax) - [2023] 151 taxmann.com 270 (Calcutta)

Judiciary and Counsel Details

• • Krishna Rao, J.
  • Jagriti Mishra, Subham Gupta, Ms Mrinmoyee Das & Reshab Kumar for the Petitioner.
  • Subir Kumar Saha, Ld. A.G.P & Bikramaditya Ghosh for the Respondent.

Facts of the Case

In the instant case, the petitioner claimed credit of input tax against supply made from a supplier. However, the credit was rejected by the GST department on ground that supplier from whom petitioner claimed to have purchased goods was fake and non-existing. The department also submitted that the bank accounts open by the said supplier were on basis of fake documents and the petitioner had not verified genuineness and identity of supplier.

High Court Held

The Honorable high Court noted that at time of transaction, name of supplier as registered taxable person was already available with Government record and the petitioner had paid amount of purchased articles as well as tax on same through bank and not in cash. Therefore, it could not be said that there was any failure on the part of petitioner in compliance of any obligation required under statute before entering into transactions without proper verification.

Thus, the Court held that the order rejecting said claim of ITC was to be set aside and department was directed to consider grievance of petitioner afresh by taking into consideration of documents which petitioner would intend to rely in support of such claim of ITC.