ITC cannot be denied to buyer for genuine transaction, if supplier is found to be fake later on: High Court

Petitioner claims that at the time of doing transaction, status of supplier was showing valid on Government Portal and later on even if registration of supplier is cancelled retrospectively by GST department, then buyer cannot be penalised.

Petitioner:

These writ petitions have been filed by the petitioners against the action of the respondent denying the benefit of ITC to the petitioner on purchase of the goods from the suppliers and asking the petitioners to pay the penalty and interest, on the ground that the registration of the suppliers in question has already been cancelled with retrospective effect covering the transaction period in question.

The main contention of the petitioners in these writ petitions are that the transactions in question are genuine and valid by relying upon all the supporting relevant documents required under law and contend that petitioners with their due diligence have verified the genuineness and identity of the suppliers in question and more particularly the names of those suppliers as registered taxable person were available at the Government portal showing their registrations as valid and existing at the time of transactions in question and petitioners submit that they have limitation on their part in ascertaining the validity and genuineness of the suppliers in question and they have done whatever possible in this regard and more so, when the names of the suppliers as a registered taxable person were already available with the Government record and in Government portal at the relevant period of transaction, petitioners could not be faulted if the suppliers appeared to be fake later on.

Petitioners are helpless if at some point of time after the transactions were over, if the respondents finds on enquiries that the aforesaid suppliers were fake and bogus and on this basis petitioners could not be penalised unless the department establish with concrete materials that the transactions in question were the outcome of any collusion between the petitioners and the suppliers in question.

Petitioners further submit that they have paid the amount of purchases in question as well as tax on the same and all transactions were through banks. Petitioners further submit that all the purchasers in question invoices-wise were available on the GST portal in form GSTR-2A which are matters of record.

Held:

:

Fake Invoices

:

Input Tax Credit

:

Bogus ITC

taxreply.com © 2024. All Rights Reserved