Hithaishi Infra Machine Vs Assistant Commissioner ST FAC (Andhra Pradesh High Court)
The Andhra Pradesh High Court considered a writ petition challenging the reversal of closing Input Tax Credit (ITC) following cancellation of GST registration. The petitioner, a registered dealer under the GST Act, was issued a show cause notice on 24.08.2024 proposing cancellation of registration on the ground that business was not being conducted at the principal place of business. As no reply was submitted, the registration was cancelled by order dated 10.09.2024 with retrospective effect from 16.07.2020. Thereafter, a show cause notice dated 13.02.2025 was issued directing reversal of closing ITC of ₹22,68,580/- under Section 29(5) of the Act, which was confirmed by an assessment order dated 01.03.2025.
The petitioner challenged the ITC reversal, contending that no reply was filed earlier due to the departure of the firm’s accountant and lack of access to notices uploaded on the GST portal after cancellation. During the hearing, it was pointed out that the petitioner had separately challenged the cancellation of GST registration in an earlier writ petition, which was allowed by the High Court on 24.09.2025, resulting in restoration of the registration.
The Court examined the impugned ITC reversal order and noted that it was based solely on the premise that the GST registration stood cancelled and that the petitioner had neither filed Form GSTR-10 nor obtained a new registration for transfer of credit. However, in view of the subsequent restoration of the GST registration by the High Court, the basis for invoking Section 29(5) no longer survived. The Court held that once the registration itself was restored, the question of reversing the closing balance of ITC did not arise.
