ITC Cannot Be Denied To Purchasing Dealer Solely Due To Retrospective Cancellation Of Supplier's GST Registration: Calcutta High Court

The Calcutta High Court held that Input Tax Credit (ITC) cannot be denied to a purchasing dealer merely because the supplier's GST registration was cancelled retrospectively. Justice Hiranmay Bhattacharyya noted that apart from holding that the invoice dates were after the effective date of cancellation of the registration certificate of the supplier in question, no other ground has been mentioned by the appellate authority as a ground for denial of Input Tax Credit. In this case, a show cause notice was issued to the assessee/petitioner alleging that certain discrepancies were found upon examination of the returns filed for the financial year 2019-2020. It was alleged that the assessee availed Input Tax Credit (ITC) on supplies made by the persons whose registration was cancelled retrospectively and that such ITC is not admissible under Section 16 of the CGST and WBGST Act, 2017. The adjudicating authority passed an order under Section 73(9) of the WBGST Act, 2017, confirming the demand made in the show cause notice. The assessee argued that retrospective cancellation of GST registration of a supplier cannot be a ground for denying the Input Tax Credit to a purchaser. The department submitted that the burden of proof lies upon the person claiming Input Tax Credit to substantiate by production of material evidence that the transaction was a bona fide one, and there was actual physical movement of goods from the supplier's end to the purchaser. The bench stated that though the effective date of cancellation of the GST registration of the supplier in question, is prior to the date of issuance of the invoices, it is not in dispute that the GST registration of the said supplier was cancelled after issuance of the invoice date, but with a retrospective effect from October 12, 2018. The bench noted that it is not the case of the Revenue that, as on the date when the supplies are claimed to have been made by the supplier to the assessee, the registration of the supplier was not valid. The bench opined that the order passed by the appellate authority is a non-speaking order and for such reason, the same is liable to be set aside. In view of the above, the bench disposed of the petition and directed the appellate authority to pass a reasoned order. Case Title: Shyamalmay Paul v. Assistant Commissioner SGST, Siliguri Charge, Siliguri & Ors. Case Number: WPA 2192 of 2025 Counsel for Petitioner/Assessee: Boudhayan Bhattacharyya, Stuti Bansal, Keya Kundu Counsel for Respondent/Department: Joyjit Choudhury, Rima Sarkar Click Here To Read/Download Order

ITC Cannot Be Denied To Purchasing Dealer Solely Due To Retrospective Cancellation Of Supplier's GST Registration: Calcutta High Court

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ITC Cannot Be Denied To Purchasing Dealer Solely Due To Retrospective Cancellation Of Supplier's GST Registration: Calcutta High Court

Mehak Dhiman

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INR 1099+GST

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