Jyoti Tar Products Private Limited Vs Deputy Commissioner (Calcutta High Court)
The case involves Jyoti Tar Products Pvt. Ltd., which challenged the denial of Input Tax Credit (ITC) under the GST regime. The issue arose when tax authorities alleged that the company had claimed ITC on supplies from vendors whose GST registrations were retrospectively canceled. The company contended that at the time of purchase, the suppliers were validly registered and that all transactions were conducted through proper banking channels, supported by tax invoices, e-way bills, and other documentation. Despite submitting these details in response to the pre-show cause notice and subsequent show cause notice, the adjudicating authority ruled against the company without addressing the key legal questions—whether retrospective cancellation of a supplier’s registration affects a purchaser’s ITC claim and whether the movement of goods was sufficiently proven.
The Calcutta High Court found that the adjudicating authority failed to consider these critical issues and the relevant legal precedents cited by the company. It ruled that the case should be re-examined, allowing the company to submit a fresh response with supporting legal references. The court set aside the prior orders, including the adjudication under Section 74(9) of the CGST Act, and directed the Deputy Commissioner of State Tax to reconsider the case. The company has been given 15 days to file an additional reply before the re-adjudication. The decision highlights the importance of fair evaluation in ITC disputes and sets a precedent for cases involving retrospective cancellation of supplier registrations.
