TaxTMI 
TaxTMI 
TaxTMI 
Know Your Limits. Part 9. ( A series under GST)
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....now Your Limits. Part 9. ( A series under GST)<br>By: - K Balasubramanian<br>Goods and Services Tax - GST<br>Dated:- 25-8-2025<br><br>Today, I had an occasion to go through a case law dated 18/08/2025 passed by Allahabad High Court. I noticed that a show cause notice was issued under Section 74 only on the sole ground that the suppliers GST Registration was cancelled after the date of supply and ....
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....hence ITC was wrongly availed based on paper transaction without actual supply of goods. All arguments of the petitioner including proof for movement of goods, though taken on record were not considered by both the adjudicating officer as well as the first appellate authority and order was passed denying the ITC. Left with no option, the petitioner approached the jurisdictional high court seekin....
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....g required relief. The high court examined this issue at length and concluded on the basis of documents submitted that both the officers erred in passing the respective orders and set aside the both the orders granting relief to the petitioner. The issue is closed as the case was not remanded but concluded. The entire case has been built by GST authorities on the ground that the supplies to....
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....ok place on 20/06/2018 and the supplier registration was cancelled subsequently on 28/09/2018. Since the supplier registration was cancelled, the transaction that took place on 20/06/2018 was only a paper transaction and there was no need to refer to any documents. The petitioner produced several documents before adjudicating officer as well as first appellate authority such as e way bill, GST Inv....
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....oice, ledger abstract of seller, bank statements as well as copy of GSTR 2A. Though everything was taken on record, to utter surprise, authorities held the transaction as a paper transaction and passed orders accordingly. As a matter of abundant caution, notice was issued under Section 74 on 07/09/2022 though there was no need to invoke 74 as section 73 itself is applicable as on that date. Order....
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.... In Original was passed on 17/11/2023 confirming denial of ITC. The appeal also failed as Order In Appeal passed on 24/12/2024 rejected the appeal. Interestingly, e way bill was stamped by tax authorities on 21/06/2018 by intercepting GST officials which has helped the petitioner to prove that movement of goods took place. The operative portion of the Allahabad High Court is furnished as passed ....
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....by the court 11. Once on the date of transaction the seller was having a valid registration and the transaction was through a valid billing channel, which has neither been denied nor any adverse material has been brought on record, no adverse inference can be drawn against the petitioner. 12. In view of the above, the impugned orders cannot be sustained in the eyes of law and are hereby quashed.....
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.... 13. The writ petition stands allowed. 14. Any amount deposited during pendency of the present litigation shall be refunded to the petitioner within a month from the date of presentation of a certified copy of this order. Case Details: M/s Kesarwani Traders Versus State of Up And 3 Others - 2025 (8) TMI 1132 - ALLAHABAD HIGH COURT Conclusion: This article is written to create awareness am....
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....ongst all concerned that the orders as well as appeal orders must be based on the law as well as the facts and documents furnished. The Tax Officials have the rights to reject documents only with proper justification for such rejection and resist from passing similar orders once the same is quashed by the jurisdictional High Court in the interest of Justice. Reply By Sadanand Bulbule as = Well ....
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....articulated article Sir. Under the situation decided by the High Court [supra], there is an alternative provision under Section 75[2] without waiting for the final order to be passed under Section 74 of the CGST Act. Dated: 25-8-2025<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....