Tax Credit Claim Reinstated: Procedural Fairness Prevails, Authorities Must Reassess Evidence Within Eight Weeks

HC allowed petitioner's appeal challenging tax credit rejection. Court found no evidence of fraud, noting genuine bank payments and proper supplier verification. Directed tax authorities to reconsider ITC claim within eight weeks, emphasizing procedural fairness and requiring substantive review of submitted documentation supporting the original tax credit claim.

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Issues involved:
The petitioner challenges the rejection of appeal by the Joint Commissioner, State Tax, West Bengal, seeking Input Tax Credit (ITC) on purchases from a supplier, along with penalty and interest under GST Act.

Judgment Details:
1. The petitioner, a registered taxable person, claimed credit of input tax against supplies made from a supplier. The petitioner's ledger showed total purchase credit of Rs. 13,04,586. The petitioner purchased goods from Global Bitumen and paid through bank.

2. The petitioner disputes the order denying ITC, alleging the supplier is fake and non-existing. Respondents claim supplier's registration was cancelled retrospectively, covering the transaction period.

3. The petitioner submitted additional documents supporting the transactions, asserting genuine purchases and payments made through bank.

4. Petitioner relied on legal judgments highlighting that mere allegation of fake credit cannot justify rejecting refund application without proof of non-receipt of goods or non-payment.

5. Respondents argue supplier's registration was cancelled before the transaction date, making the petitioner's reliance on the supplier's authenticity irrelevant.

6. The Court found the petitioner diligently verified supplier details, paid through bank, and no collusion was alleged. Lack of proper verification by authorities led to rejection based solely on retrospective cancellation of supplier's registration.

7. The Court referenced an unreported judgment supporting the petitioner's case, setting aside the impugned orders and directing reconsideration based on petitioner's supporting documents.

8. The respondent is instructed to review the petitioner's claim, considering the submitted documents, and provide a reasoned decision within eight weeks.

Conclusion:
The High Court of Calcutta ruled in favor of the petitioner, directing a fresh review of the claim with proper consideration of submitted documents within a specified timeframe.

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