Input tax credit demands proof of genuine goods movement; cancellation of GST registration sustained on suspicious transaction records.

Input tax credit requires the dealer to prove genuine transactions and actual receipt and movement of goods; on the facts, the HC found that the business premises, invoicing pattern and surrounding circumstances indicated a structured arrangement to camouflage dealings and support false credit. The absence of convincing transport records and other documentary proof justified sustaining cancellation of GST registration and rejection of the statutory appeal. The Court also rejected the allegation of denial of opportunity because no recorded objection or prejudice was shown. The challenge accordingly failed, and the revenue authorities were left free to proceed with recovery of tax and penalty where permissible.

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Issues: Whether interference was warranted with the orders cancelling GST registration and rejecting the statutory appeal on the ground of alleged wrongful availment of input tax credit and lack of genuine movement of goods.

Analysis: The record showed that the registration was obtained for the same premises in which another business was already operating, and the surrounding circumstances supported the finding that the transactions were structured to camouflage the petitioner's dealings. The orders below proceeded on the basis that the petitioner failed to establish actual receipt and physical movement of goods and did not discharge the burden cast on a dealer claiming input tax credit. The absence of convincing documentary proof of genuine transportation and the inconsistencies relating to the use of the premises and invoicing were treated as sufficient to sustain the cancellation and appellate rejection. The Court also found no merit in the complaint of denial of opportunity, since the petitioner did not demonstrate any recorded objection or prejudice.

Conclusion: The challenge to the cancellation of registration and the rejection of the appeal failed, and the findings against the petitioner were upheld.

Final Conclusion: The writ petition was dismissed, and the revenue authorities were left free to take steps for recovery of tax and penalty, if otherwise permissible.

Ratio Decidendi: A claim for input tax credit cannot succeed unless the dealer establishes the genuineness of the transaction and the actual receipt and movement of goods, and cancellation of registration can be sustained where the surrounding facts show that the registered business arrangement was used to disguise illegitimate credit availed on false invoices.

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