The Hon’ble Calcutta High Court in the case of M/s LGW Industries Limited & Ors. v. Union of India & Ors., (WPA No.23512 of 2019) vide its judgment dated 13th December’2021 has remanded the matter back to the GST authorities to consider afresh the cases of the petitioners on the issue of their entitlement of benefit of input tax credit by considering the documents which the petitioners 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.
ITC was being denied by the GST authorities on the ground that the suppliers from whom the petitioners/buyers claimed to have purchased the goods are all fake and non-existing and the bank accounts opened by those suppliers are on the basis of fake documents and petitioners’ claim of benefit of input tax credit are not supported by the relevant documents. It was further alleged that the petitioners have not verified the genuineness and identity of the suppliers before entering into any transaction. Further grounds of denying the input tax credit benefit to the petitioners is that the registration of suppliers in question has already been cancelled with retrospective effect covering the transactions.
It was directed by the Hon’ble High Court that if it is found upon considering the relevant documents that all t
zhe 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.
This matter was represented by Advocate Vinay Shraff with Advocate Himangshu Kumar Ray, Advocate Ankit Kanoria & Advocate Priya Sarah Paul.
Author Bio
Sir,
Why Govt. has introduced S.16(aa), in GST Act reading as under;
“(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;”.
What will happen when any of the supplier fails to furnish &/or wrongly furnish any invoice in the statement of outward supplies and the Govt. is reluctant to verify the genuineness of transaction in view of specific provision in law.
CA Om Prakash Jain s/o J.K.Jain, Jaipur.
Tel.9414300730