TVL. Cleon Optobiz Pvt Ltd Vs Assistant Commissioner (ST) (Madras High Court)
A recent writ petition filed by Cleon Optobiz Pvt Ltd against the Assistant Commissioner (ST) challenges an order dated 19.09.2023 related to the financial year 2020-2021. The petitioner, a registered entity under GST laws, contests the reversal of Input Tax Credit (ITC) availed on purchases from M/s. Prince Sales Agency. The primary contention is that the reversal was based on the subsequent cancellation of M/s. Prince Sales Agency’s GST registration, which the petitioner argues should not affect their ITC claim. This article delves into the key arguments presented by both parties and the court’s findings.
Background: The petitioner, Cleon Optobiz Pvt Ltd, received communication about the blocking of credit, followed by an intimation and a show cause notice from the authorities. The impugned order reversed the ITC availed on purchases from M/s. Prince Sales Agency, citing the non-existence and cessation of business by the said entity. Cleon Optobiz contends that they should not be penalized for the retrospective cancellation of M/s. Prince Sales Agency’s GST registration.
Petitioner’s Arguments:
- Retrospective GST Cancellation: Cleon Optobiz asserts that the subsequent cancellation of M/s. Prince Sales Agency’s GST registration should not impact their ITC claim. The petitioner highlights the timely submission of relevant invoices, e-way bills, and bank statements as proof of payment against the invoices.
- Judicial Precedent: The petitioner’s counsel relies on the judgment in Jinsasan Distributors, arguing that ITC cannot be reversed based on the subsequent cancellation of the supplier’s GST registration.
- Erroneous Conclusion: The petitioner challenges the order’s finding that they failed to produce documents as required under Section 16 of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act). They argue that documentary evidence, including invoices and payment proofs, was submitted.
Government’s Response:
