Clear Secured Service Private Limited Vs Assistant Commissioner (ST) (Madras High Court)
ITC Cannot Be Denied Solely on the Ground that the Supplier was Subsequently Declared Non-Existent, Without Examining the Documentary Evidence Furnished by the Assessee: Madras High Court
The Madras High Court held that the Revenue Department cannot deny Input Tax Credit (ITC) solely because the supplier was subsequently declared non-existent without examining the documentary evidence produced by the assessee. The petitioner had furnished bank statements, tax invoices, e-way bills, ledger extracts and Form GSTR-2A and GSTR-2B to substantiate the genuineness of the supplies. The Court observed that while the burden of proving eligibility for ITC lies on the claimant, the assessing authority was required to consider the documents and, if found insufficient, provide an opportunity to furnish additional evidence. Instead, the tax proposal was confirmed only on the ground that the supplier’s registration had been cancelled. The Court also noted that the show cause notice referred to Section 73 of the CGST/TNGST Act, whereas the assessment order was passed under Section 74. Accordingly, the assessment order was set aside and the matter remanded for fresh consideration, with a direction to pass a fresh order within three months after granting the petitioner a reasonable opportunity of hearing.
