The single judge bench of Justice Krishna Rao of the Calcutta High Court in the case of M/s. Gargo Traders Vs The Joint Commissioner, Commercial Taxes held that cancellation of registration of the supplier with retrospective effect can’t be the sole ground for rejecting the claim of the petitioner.
Brief Facts
The factual matrix of the case is that the Petitioner is the registered taxable person claiming credit of input tax against supply made from a supplier. According to the ledger account, the Petitioner made the total purchase credit of Rs. 13,04,586/- from the period of 01.04.2018 to 31.03.2019. The Petitioner has filed a tax invoice reflecting a purchase of Rs. 11,31,513.00 from Global Bitumen. The debit note for Rs. 1,73,073.00/- was issued in the name of the transporter, the International Transport Corporation. Using the bank account associated with the petitioner, the petitioner paid Global Bitumen.
The petitioner herein, challenged the order passed by the Respondents for not allowing the petitioner and refusing to grant the benefit of Input Tax Credit (ITC) on purchase from supplier.
Contentions of the Petitioner
The learned counsel appearing on behalf of the Petitioner contended that the respondents failed to consider the said document as it is very much clear from the documents that the petitioner has purchased the goods from the supplier and also transferred the amount the bank account of the supplier. It was furthermore contended that unless it is proven that the petitioner has not received the products or paid for them, the accusation of fraudulent credit used by Global Bitumen cannot be a reason for denying the petitioner's refund application.
The learned counsel appearing on behalf of the Petitioner relied upon the judgments titled M/s. LGW Industries Limited & Ors. –vs- Union of India & Ors. and Balaji Exim –vs- Commissioner, CGST & Ors.
Contentions of the Respondent
The learned counsel appearing on behalf of the Respondent contended that the transaction was in November 2018 and the registration of the supplier was canceled by the authorities with effect from 13.10.2018. it was furthermore contended that the judgments on which the petitioner relied will not be applicable in the present case.
Observation of the court
The Hon’ble High Court observed that the petitioner has paid the amount of the acquired items as well as tax on the same through the bank and not in cash, and the identity of the supplier as the registered taxable person was already accessible with the Government record at the time of the transaction. In relation to the transaction, there is no collusion between the petitioner and the supplier.
It was noted that the respondent authorities rejected the petitioner's claim without taking the petitioner's relying documents into account, only taking into consideration the supplier's registration cancellation with retrospective effect.
Based on these considerations, the Hon’ble court set aside the impugned order.
Decision of the Court
With the above direction, the Hon’ble High Court disposed of the writ application.
Case Title: M/s. Gargo Traders Vs The Joint Commissioner, Commercial Taxes
Coram: Hon’ble Mr. Justice Krishna Rao
Citation: WPA 1009 of 2022
Advocates for the Petitioner: Ms. Jagriti Mishra, Mr. Subham Gupta, Ms. Mrinmoyee Das Mr. Reshab Kumar
Advocates for the Respondents: Mr. Subir Kumar Saha, Ld. A.G.P Mr. Bikramaditya Ghosh
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