Additional Commissioner Vs Safecon Lifesciences Private Limited (Supreme Court of India)
The matter arose from a writ petition challenging the order dated 20.12.2022 passed by the Additional Commissioner, Grade-2 (Appeal)-II, State Tax, Agra, and the order dated 12.01.2022 passed by the Deputy Commissioner, Commercial Tax, Agra. The petitioner, engaged in the wholesale trading and manufacturing of medicines and pharmaceutical products, had purchased goods from M/s Unimax Pharma Chem during April 2021 under a tax invoice dated 30.04.2021. According to the petitioner, the supplier was duly registered under GST and held a valid drug licence at the time of supply. The purchases were supported by tax invoices, e-way bills, transport bilty, and payments through banking channels. The petitioner also asserted that the supplier had filed GSTR-1 and GSTR-3B and paid tax on the relevant turnover.
Read HC Judgment in this case: Section 74 Proceedings Invalid Without Fraud or Willful Misstatement: Allahabad HC
The dispute arose after the Deputy Commissioner issued a show cause notice under Section 74 of the UPGST Act alleging that the petitioner had wrongly claimed Input Tax Credit (ITC) on purchases from M/s Unimax Pharma Chem, whose registration had subsequently been cancelled. The petitioner submitted a detailed reply contending that the supplier had deposited tax as reflected in GSTR-3B, that actual purchases had been made, and that the authorities had incorrectly recorded findings regarding absence of genuine purchases and mismatch in GSTR-2A. The adjudicating authority rejected the reply, holding that ITC could be claimed only when the supplier had deposited the tax as required under Section 16(2)(c). The petitioner’s appeal was also dismissed on the ground that the supplier had purchased goods from firms which had not deposited tax and had allegedly claimed forged ITC.
