• Notification Date: 16-05-2022
• Notification No: N/A

Calcutta High Court Allows GST ITC to Assessee

The Calcutta High Court bench consisting of Justice Md. Nizamuddin has recently passed a new ruling. According to the order passed by the HC, Input Tax Credit (ITC) cannot be denied to be granted to those assessees whose GST registration has been cancelled after making genuine transactions with the suppliers.

The petitioners/assessees were quite disappointed by the decision taken by the GST department that denies the benefit of Input Tax Credit (ITC) to the assessees. As per the order passed by the department, the ITC was denied the purchase of the goods in question from the suppliers. The petitioners were asked to pay the penalty along with the interest under the provisions of the GST Act. The department charged the assessees with penalty and interest as the registration of the suppliers in question had been cancelled with retrospective effect. The due transaction period has been already covered.

The petitioner ensured the department that the transactions were genuine and he verified himself that the suppliers were valid at the time of transaction. He made sure that the identity of the suppliers was authentic. He also contended that the names of those suppliers were available at the government portal. They were registered taxable persons. The registrations were authentic and valid at the time of transactions.

According to the statement of the petitioners, they had some limitations in disclosing the validity and genuineness of the suppliers. Burt they have taken the necessary steps required for verifying the authenticity of the suppliers in question. The names of the suppliers were available on the government portal along with their previous records at the time of the transactions. Hence, the petitioners could not be faulted if these suppliers turn out to be fake persons later.

The petitioners affirmed that they had paid the amount of purchases along with the tax in question on the same note in cash payment. All the transactions were made through banks by the petitioners. The petitioner was worried if the identities of the suppliers were found to be fake after the transactions were carried out. The petitioners ensured that all the purchasers were available on the GST portal on form GSTR-2A according to the invoices.

The Calcutta High Court has ordered the department to cancel the case of the petitioner. The court has given a period of eight weeks, and has ordered the GST department to pass a reasoned and speaking order after giving an effective opportunity of hearing to the petitioners.