ITC cannot be rejected merely on the ground that the supplier’s GST registration was cancelled with retrospective effect.
In The case of Engineering Tools Corporation v. the Assistant Commissioner (ST), the Madras High Court (‘High Court’) held that an Input Tax Credit (‘ITC’) claim cannot be rejected merely on the ground that the supplier’s GST registration was cancelled with retrospective effect. It further held that the genuineness of the claim needs to be verified by considering relevant documents from the transaction.
Let us have a Short Overview of the Case: –
Facts of the case
• Disregarding the relevant documents such as tax invoices, e-way bills, transport documents and proof of payment, M/s Engineering Tools Corporation was served an assessment order, wherein the Input Tax Credit (‘ITC’) was reversed on the sole ground of retrospective cancellation of the supplier’s GST registration.
• Aggrieved by the same, the Petitioner preferred the present writ petition before the High Court.
Discussion and findings
• The High Court observed that despite the
submission of relevant documents, the ITC claimwas rejected solely on the ground that the petitioner should have proved the existence of the supplier.
The Court quashed the assessment order and remanded the matter directing the assessing officer to issue a fresh order after reconsidering the genuineness of the transaction by verifying the relevant transaction documents
The copy of the order is as under:
