Denial of ITC due to cancellation of registration of supplier of goods with retrospective effect

ACIT Vs LGW Industries Limited & ors. (Calcutta High Court)

Hon’ble Division Bench of Calcutta high Court has dismissed the appeal of the department vide its judgment dated 16th September, 2022 in a dispute relating to denial of Input Tax credit due to cancellation of registration of supplier of goods with retrospective effect.

Hon’ble single bench of Calcutta High Court vide its judgment dated 13th December’2021 had held that if it is found upon considering the relevant documents that all the purchases and transactions in question are genuine and supported by valid documents and transactions were made before the cancellation of registration of those suppliers than the benefit of input tax credit shall be given to the petitioners.

Hon’ble single bench of Calcutta High Court had remanded the matter back to the departmental officers to consider afresh the cases of the petitioners on the issue of our entitlement of benefit of input tax credit by considering the documents which they want to rely in support of their claim of genuineness of the transactions by considering whether payments for purchases with GST has been actually paid or not to the suppliers and by also considering whether the transactions and purchases were made before or after the cancellation of registration of the suppliers and the compliance of statutory obligation by the petitioners in verification of identity of the suppliers.

Hon’ble Division bench of Calcutta High Court has dismissed the appeal of the department against the aforesaid order with a direction to the petitioners to submit one more set of documents which they seek to rely upon to the concerned appellant authority within a period of two weeks from the date of receipt of the server copy of the order and on receipt of these documents, the concerned authority shall afford an opportunity of personal hearing to their authorized representative and peruse the documents, take note of the directions issued by the learned Single Judge and proceed to act on merits and in accordance with law and conclude the proceedings as expeditiously as possible preferably within a period of four weeks from the date on which the personal hearing is concluded.

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