A petition filed by a buyer who was denied the benefit of Input Tax Credit (ITC) by the responded GST concerned who stated that the supplier in consideration did not have a valid GST registration at the time of purchase. The buyer was, hence, charged with penalty and interest.
The petitioner (buyer), however, countered that all the transactions made were genuine and that they had the required documents that would verify the authenticity of the supplier. The petitioner also claimed that the name of the supplier was available on the official website as a registered taxable person. This means that when the supplier had a valid GST registration at the time of transaction, the petitioner could not be blamed for any discrepancy on the part of the supplier.
The petitioner also claimed that they had paid the purchase amount along with tax through bank transfer to ensure all the transactions made were recorded. It would, therefore, be unfair to blame the petitioner if the supplier had faked their documents and that there was no way to know that.
Also, the petitioner submitted that all the purchases were available on the GST portal in form GSTR-2A, so it would be discriminatory to presume that the petitioner was at fault. To support their point, the petitioner highlighted the unreported judgement of this Court, dated December 13, 2021 – M/s. LGW Industries Limited & Ors. Vs. Union of India & ORs. in W.P.A. No.23512 of 2019, .
Based on the facts presented and documents supported by the petitioner, the Honourable Calcutta High Court in the matter of Sanchita Kundu remanded these cases and orderded the concerned officer to consider the petitioner’s documents and look at the matter from a fresh perspective. It was ordered that an investigation be made whether the buyer made the payment along with GST before or after the supplier’s registration was cancelled, apart from verifying the identity of the suppliers in question.
It was ruled that if the petitioner had made the payment before the supplier’s GST registration got cancelled and if the decisions by the SC and HC in the cases supported by the petitioner concur, then the petitioner should rightfully be given the benefit of ITC.