Input Tax Credit and retrospective supplier cancellation required fresh examination of invoice validity under GST rules.

Denial of Input Tax Credit on invoices issued by a supplier whose registration was later cancelled retrospectively was required to be re-examined in light of the statutory conditions under Section 16 of the CGST Act, the invoicing requirements under Section 31, and Rule 36 of the CGST Rules. The dispute turned on whether purchases made when the supplier was shown as registered on the GST portal could still support credit despite subsequent retrospective cancellation. The HC found that the authority's treatment of the invoices and cancellation required fresh consideration with reference to the relevant Division Bench decisions and the material relied on by the assessee, and directed reconsideration by a reasoned order.

---

---

Issues: Whether denial of Input Tax Credit on invoices issued by a supplier whose registration was retrospectively cancelled called for interference and whether the matter required reconsideration by the tax authority.

Analysis: The dispute concerned entitlement to Input Tax Credit on purchases made during the period when the supplier was shown as registered on the GST portal, notwithstanding later retrospective cancellation of the supplier's registration. The challenge was assessed in the light of the statutory conditions for Input Tax Credit under Section 16 of the Central Goods and Services Tax Act, 2017, the invoicing requirements under Section 31 of that Act, and Rule 36 of the Central Goods and Services Tax Rules, 2017. The authority's treatment of the invoices and the retrospective cancellation was found to require fresh examination in the light of the cited Division Bench decisions and the material relied upon by the petitioner.

Conclusion: The petitioner's challenge succeeded at the present stage, the impugned order was set aside, and the matter was directed to be reconsidered by passing a reasoned order.

---