Regarding GSTIN Cancelled suo-moto.

[JIGNESH SITAPARA]

Dear Experts,

My client has received demand notice (DRC-7) Rs. 18 lacs due to his supplier GST number cancelled under suo-moto. The suo-moto date after the invoice date. (Invoices received in April 2018 and suo-moto cancelled 01-09-2022). Now, all condition fulfilled all conditioned prescribed under Section 16 of SGST Act, 2017/CGST Act, 2017. But, supplier not generated eway bills at the time of supply. 

So, please guide me how file appeal without e-way bill ?

[Sadanand Bulbule]

The core of your argument is that the retrospective cancellation of a suppliers registration (in 2022) cannot invalidate a bona fide transaction from 2018, as the "doctrine of impossibility" prevents a buyer from predicting a suppliers future default. While the absence of an E-way bill is a procedural lapse, it is not fatal to the ITC claim if you can substantiate the physical movement of goods through secondary evidence like Lorry Receipts, weighbridge slips, and bank-verified freight payments.

Rely on judicial precedents which affirm that a genuine recipient should not be penalized for the suppliers later non-compliance, provided the tax was paid and the goods were received at the time of the invoice.

[JIGNESH SITAPARA]

Sir, Thanks for reply.

Also, request you to, if you have any details of judgement please provide me.

[Sadanand Bulbule]

2023 (3) TMI 533 - SUPREME COURT - THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED

[JIGNESH SITAPARA]

Thanks Sir

[KASTURI SETHI]

Dear Querist,

Although the judgement of Hon'ble Supreme Court is in favour of State of Karnataka, yet it would be very useful to you, especially, keeping in view genuineness of your transactions.

I fully support the reply of Sh. Sadanand Bulbule, Sir

[Shilpi Jain]

If payment to supplier pending then the 180 days condition to avail ITC has not been fulfilled?

 

[Shilpi Jain]

Eway bill does not have much relevance for ITC provided you are able to prove that goods have actually been received.

AI Summary

GST input tax credit denial due to supplier's suo motu cancellation can be contested using secondary evidence. Retrospective suo motu cancellation of a supplier's GST registration does not automatically defeat a recipient's ITC claim if all Section 16 conditions were met at the time of supply; absence of an e way bill is a procedural lapse that may be cured by secondary evidence proving receipt and movement of goods, and compliance with payment conditions such as the 180 day rule is relevant to entitlement.