Input tax credit cannot be denied solely due to retrospective supplier registration cancellation without examining transaction genuineness.

Input tax credit cannot be denied merely because the supplier's GST registration was cancelled retrospectively. The High Court noted that the adjudicating and appellate authorities had not examined the genuineness of the underlying transaction or the supporting documents before applying Section 16(2) of the CGST Act, 2017. As the factual basis for denial had not been properly verified, the existing orders could not stand. The matter was remanded for a fresh decision on the merits after due examination of all relevant documents.

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Issues: Whether denial of input tax credit could be sustained merely because the supplier's registration had been cancelled retrospectively, and whether the matter required reconsideration after examining the genuineness of the transaction and the relevant documents.

Analysis: The denial of input tax credit was founded solely on retrospective cancellation of the supplier's GST registration. The record did not show that the adjudicating authority or the appellate authority had examined whether the underlying transaction was genuine or had considered the relevant documents before proceeding under Section 16(2) of the Central Goods and Services Tax Act, 2017. The question of genuineness could not be determined without such examination.

Conclusion: The denial could not be sustained on the existing record and the matter required fresh consideration after examining all relevant documents.

Final Conclusion: The impugned orders were set aside and the matter was remanded to the adjudicating authority for a fresh decision on the merits after due examination of the documents.

Ratio Decidendi: Input tax credit cannot be denied solely on the basis of retrospective cancellation of the supplier's registration without a factual examination of the genuineness of the transaction and the supporting uments.

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