ITC of FY 2017-18 blocked

[SUSHIL BANSAL]

Dear experts,

our client purchased goods from a supplier in the FY 2017-18.Now the registration of the supplier cancelled by the department from the date which is before our purchase date and our ITC blocked by the department on dated 30.4.2024.My querry is whether this action of the department is legally valid as we have not been issued any show cause notice & the time limit of notice u/s 73/74 has already expired.

AI Summary

Client Challenges Retrospective Cancellation of ITC Due to Supplier's GST Status; Considers Appeal Under Rule 86A, Sections 73/74 A client faced blocked Input Tax Credit (ITC) for FY 2017-18 after their supplier's GST registration was retrospectively canceled. The client questioned the legality of this action, as they received no show cause notice (SCN) and the time limit for such notice had expired. Respondents advised that retrospective cancellation without proper notice is often challenged successfully in courts, and suggested filing an appeal or writ petition. They discussed relevant legal provisions, such as Rule 86A and Sections 73/74, and emphasized the importance of proving genuine transactions and the absence of fraud for ITC entitlement.