ITC cannot be denied on the sole ground that supplier's GST registration was cancelled with retrospective effect: High Court

Petitioner:

The petitioner assails an assessment order dated 30.12.2023 by which the Input Tax Credit (ITC) availed of by the petitioner was reversed on the ground that the GST registration of the relevant supplier was cancelled with retrospective effect.

The petitioner asserts that he had purchased goods from supplier and that such purchases are supported by tax invoices, e-way bills, transport documents and proof of payment to the supplier through regular banking channels. In spite of submitting all these documents, it is stated that the ITC was reversed solely on the ground that the registration of the petitioner's supplier was cancelled with retrospective effect.

Revenue:

Learned Additional Government Pleader submits that it is a fairly prevalent phenomenon that bill trading is undertaken by creating documents like tax invoices, e-way bills and the like.

Observation of the Proper Officer is as follows:

The petitioner has made purchase from non-existent person whose registration has been cancelled with retrospective effect. If it's suppliers is a genuine Tax Payer, then petitioner should have filed the proof for the existence of its supplier. Instead petitioner has stated that they are purchasing goods from them and claimed ITC based on the purchase bills. Hence, it is proved beyond doubt that the supplier is a Non-Existent dealer and issued fake invoices to the beneficiaries. In view of the above facts, the contention is not sustainable and it is overruled. Therefore the above proposal is hereby confirmed.

High Court:

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Fake Invoices

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Bogus ITC

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ITC Reversal

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Non Existent Supplier

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Cancellation of Supplier GST Registration

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