The petitioner, M/s Gargo Traders, a registered taxable person under the GST regime, challenged the order dated 13 April 2022 passed by the Joint Commissioner, State Tax, West Bengal, whereby the appeal preferred by the petitioner was rejected and the order of the Adjudicating Authority denying Input Tax Credit (ITC) was upheld.

The petitioner had claimed ITC in respect of purchases made during the period 1 April 2018 to 31 March 2019, supported by tax invoices, debit notes, e-Way bills, transportation documents, and bank statements evidencing payment through banking channels to the supplier, Global Bitumen. The respondent authorities denied ITC on the ground that the supplier was allegedly fake and non-existent and that its GST registration had been cancelled retrospectively covering the relevant transaction period.

The petitioner contended that at the time of the transactions, the supplier was reflected as a valid registered taxable person on the GST portal and that all statutory requirements had been complied with. It was further submitted that there was no allegation of collusion between the petitioner and the supplier and that payments, including tax, were made through bank and not in cash. Reliance was placed on judicial precedents including M/s LGW Industries Limited v. Union of India and Balaji Exim v. Commissioner, CGST.

The respondent authorities argued that the cancellation of the supplier’s registration had retrospective effect and had been accepted by the supplier, rendering the petitioner ineligible for ITC.

Upon consideration of the submissions and materials on record, the High Court observed that the authorities had rejected the petitioner’s ITC claim solely on the basis of retrospective cancellation of the supplier’s registration, without properly examining the documentary evidence produced by the petitioner. The Court noted that it was not the case of the respondents that the petitioner had colluded with the supplier, and that at the time of the transactions, the supplier was shown as a valid registered taxable person on the official GST portal.

The Court held that, in the absence of proper verification and without disproving the genuineness of the transactions, denial of ITC was unsustainable. Applying the principles laid down in LGW Industries Limited, the Court set aside the impugned orders and remanded the matter to the respondent authority for fresh consideration.

The respondent authority was directed to re-examine the petitioner’s claim after considering all relevant documents and to pass a reasoned and speaking order after granting an opportunity of hearing within a period of eight weeks.

Accordingly, the writ petition was disposed of in the above terms.

 Source Link - https://www.mytaxexpert.co.in/uploads/1768213377_Ms.GargoTradersVersusTheJointCommissionerCommercialTaxesStateTaxOrs..pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.