2025 (6) TMI 586 - HC - GST

Tax Credit Claim Upheld: Authorities Must Thoroughly Verify Supplier Transactions Before Denying Input Tax Credit Refunds

HC granted petition challenging denial of Input Tax Credit (ITC) due to supplier's retrospective GST registration cancellation. Court found insufficient ... Input tax credit - denial on the ground that supplier GST registration has been cancelled with retrospective effect - HELD THAT:- Before taking any action in the matter, considering the genuineness of the transaction, the same could have been determined only after examining all the relevant documents, which does not appear to have been done in the instant case. The present petition is allowed on this ground alone and the impugned orders dated 10.01.2025 and 31.03.2024 issued by respondents No.3 and 4 are set aside. The matter is remanded back to the Adjudicating Authority, who shall decide the matter after examining all the relevant documents. The parties to appear before the said authority on 20.06.2025. Petition allowed by way of remand. The Himachal Pradesh High Court, through Justice Tarlok Singh Chauhan, granted the petition seeking quashing of impugned orders denying Input Tax Credit (ITC) to the petitioner. The petitioner challenged orders dated 10.01.2025 and 31.03.2024 issued by Respondents No. 3 and 4, which denied ITC on the sole ground that the supplier's GST registration was cancelled retrospectively. The Court noted that neither the Assessing Officer nor the Appellate Authority examined the genuineness of the transaction before issuing a notice under Section 16(2) of the CGST Act. Emphasizing the need to 'consider the genuineness of the transaction' and 'examine all the relevant documents,' the Court set aside the impugned orders and remanded the matter to the Adjudicating Authority for fresh adjudication. The writ petition was disposed of accordingly.