Sanchita Kundu & Anr. Vs Assistant Commissioner of State Tax (Calcutta High Court)
In this case before the Calcutta High Court, the petitioners challenged orders denying Input Tax Credit (ITC) on purchases made from suppliers whose GST registrations were later cancelled retrospectively. The authorities had also imposed penalty and interest on the petitioners and initiated recovery proceedings under the relevant provisions of the GST Act.
The petitioners contended that the transactions were genuine and supported by all required documents. They argued that they had exercised due diligence by verifying the suppliers’ registration status on the Government portal at the time of the transactions, where such registrations were shown as valid. Payments for purchases and taxes were made through banking channels, and the invoices were reflected in GSTR-2A on the GST portal. The petitioners submitted that they could not be penalised for subsequent cancellation of supplier registrations unless there was evidence of collusion between them and the suppliers.
The Court observed that, based on the available records, there was no immediate indication of failure by the petitioners to comply with statutory obligations or to verify the genuineness of the suppliers during the relevant period.
Accordingly, the Court set aside the impugned orders and remanded the matter to the concerned authority for fresh consideration. The authority was directed to examine whether the transactions were genuine, whether payments including GST were actually made, whether the purchases occurred before or after cancellation of supplier registrations, and whether the petitioners had complied with statutory requirements in verifying supplier identity.
