ITC claimed by the Recipient cannot be denied without conducting due diligence of Supplier

Assistant Commissioner Of State Tax Vs Suncraft Energy Private Limited & Ors. (Supreme Court of India)

The Hon’ble Supreme Court in the case of the Assistant Commissioner of State Tax, Ballygunje and Others v. Suncraft Energy Pvt. Ltd. [Special Leave Petition (C) No. 27827-27828 of 2023 dated December 14, 2023] reaffirmed the order passed by the Hon’ble Calcutta High Court in the case of  M/s. Suncraft Energy Private Limited and Another v. The Assistant Commissioner, State Tax [MAT 1218 of 2023 dated August 02, 2023] wherein the Court set aside the order of reversing excess credit availed in Form GSTR-3B as compared to Form GSTR-2A and held that the demand notice issued to the assessee for reversing the ITC could not be sustained without proper inquiry into the supplier’s actions.

Facts:

M/s. Suncraft Energy Private Limited (“the Respondent”) sells goods to the customers and charges GST from them and at the time of filing Form GSTR-3B avails ITC on inward supplies. However, some suppliers did not disclose the supplies in their Form GSTR-1 of the financial year 2017-18. Accordingly, such transactions never auto-populated in Form GSTR-2A of the Petitioner.

The Revenue Department (“the Petitioner”) issued notice to the Petitioner based on mismatch of ITC between Form GSTR-2A and Form GSTR-3B.

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