ITC cannot be denied on Genuine Transactions with suppliers whose registration cancelled after transaction.

 

Here is an interesting ruling by Calcutta High court wherein it is remarked that ITC cannot be denied on Genuine Transactions with suppliers whose registration cancelled after transaction.

The case citation is as under:

Calcutta High Court

Sanchita Kundu & Anr. Vs Assistant Commissioner of State Tax

[Appeal Number : W.P.A. 7231 of 2022 With W.P.A. 7232 of 2022]

Date of Judgement/Order : 05/05/2022

In this case, the petitioner claims that at the time of doing transaction, status of supplier was showing valid on Government Portal and later on even if registration of supplier is cancelled retrospectively by GST department, then buyer cannot be penalised.

Against this, writ petitions was filed by the petitioners against the action of the respondent denying the benefit of ITC to the petitioner on purchase of the goods from the suppliers and asking the petitioners to pay the penalty and interest, on the ground that the registration of the suppliers in question has already been cancelled with retrospective effect covering the transaction period in question.

The court observed as under:

If it is found upon verification and considering the relevant documents that all the purchases and transactions in question are genuine and supported by valid documents and transactions in question were made before the cancellation of registration of those suppliers and after taking into consideration as to whether facts of the petitioners are similar to the judgements of the Supreme Court and various High Courts and of this Court upon which petitioners intend to rely and if it is found similar to the present case in that event the petitioners shall be given the benefit of input tax credit in question.