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Supplier Transaction Evidence Allows Tax Credit Reassessment Under GST Compliance Guidelines for Trading Company HC ruled on ITC blockage for a trading company. After reviewing evidence of supplier transactions and GST compliance, the court directed tax authorities ...
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Supplier Transaction Evidence Allows Tax Credit Reassessment Under GST Compliance Guidelines for Trading Company
HC ruled on ITC blockage for a trading company. After reviewing evidence of supplier transactions and GST compliance, the court directed tax authorities to reassess the blocked input tax credit within 30 days. The petitioner was allowed to submit supplementary documentation to support transaction authenticity. The case was disposed of without imposing costs, providing an opportunity for administrative review of the tax credit claim.
Issues involved: The petitioner seeks direction for the removal of blockage of Input Tax Credit (ITC) in Electronic Credit Ledger.
Comprehensive Details:
1. The petitioner, engaged in trading iron and steel articles and registered under GST laws, had their ITC blocked after an inspection of two suppliers' premises. The petitioner filed a writ petition requesting the release of the blocked ITC, claiming genuine transactions with the suppliers.
2. The petitioner's counsel argued that the blockage of ITC has prejudiced the petitioner, hindering their ability to file returns using ITC. The respondent failed to act on the request to release the block on ITC.
3. The Government Advocate for the respondent stated that the suppliers were involved in bill trading and obtained GST registration using fabricated documents. An intimation in Form GST DRC-01A was issued to the petitioner regarding this matter.
4. To prove the genuineness of transactions with the suppliers, the petitioner must provide various documents such as invoices, e-way bills, lorry receipts, delivery challans, and bank statements. The petitioner mentioned that some documents were with central authorities, and some were provided to the respondent, but clarity is needed on documents related to purchases from one of the suppliers.
5. A request made by the petitioner on 08.01.2024 to release the blocked ITC was highlighted, emphasizing the need for the respondent to promptly consider and decide on the request.
6. The writ petition was disposed of by directing the respondent to review and address the representation within thirty days from receiving further documents from the petitioner. The petitioner was granted permission to submit additional documents within one week from receiving a copy of the order. The case was closed with no costs incurred.
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