Held - It is not in dispute that the transactions between the petitioner and the selling dealer, i.e., M/s Unique Trading Company, were held on 26.11.2021 and 30.11.2021. The registration of the selling dealer was cancelled on 08.04.2022. The record further shows that GSTR – 1/1FF and GSTR 3-B were also filed, which shows the returns and tax filed by the selling dealer. Once these facts have been brought on record, the State authorities ought to have verified the same, but instead, proceedings were initiated on the basis of subsequent inspection that the selling dealer was not found at the place of business and adverse view was drawn. This Court in Solvi Enterprises (supra) and R.T. Infotech (supra) has taken the view that when the registration of the selling dealer was cancelled subsequent to the transaction, the same can be verified on GST portal on GSTR – 2A. The record further shows that at the time when the transaction took place, the selling dealer, i.e., M/s Unique Trading Company,was duly registered. The record further shows that the selling dealer has duly uploaded GSTR – 1/1FF and GSTR 3-B. Once, atthe time of when transaction took place, the selling dealer was registered, no adverse view should have been taken against the petitioner as held by this Court in Solvi Enterprises (supra) and R.T. Infotech (supra). In view of the aforesaid facts & circumstances of the case as noted above, the impugned orders cannot be sustained in the eyes of law.

Held - It is also not in dispute that the supplier filed its return in the forms of GSTR-01 and GSTR-3B. Moreover, it is also not in dispute that without making payment of due taxes, GSTR-3B cannot be generated. Once the tax was paid by the petitioner in the forms of GSTR-01 and GSTR-3B, no adverse inference can be drawn against the petitioner on the premise that the registration of the dealer from whom the purchases were shown to be made, was cancelled subsequently. It was the duty of the authorities to verify the said information as to whether at the time of transactions, the firm was in existence or not, and therefore, without verifying the same, the authorities ought not to have initiated the proceedings against the petitioner only on the borrowed information as the petitioner discharged its preliminary duty by making the payment of due taxes through banking channels. In view of the above facts as stated, the impugned orders cannot be sustained in the eyes of law and the same are hereby quashed.

Held: After going through the show-cause notice this court finds that it was alleged that the petitioner had availed ITC under CGST and WBGST Acts on suppliers made by person whose registration was cancelled retrospectively. Though the effective date of cancellation of the GST registration of the supplier in question namely Arijit Dey is prior to the date of issuance of the invoices but it is not in dispute that the GST registration of the said supplier was cancelled after issuance of the invoice date but with a retrospective effect from October 12, 2018.  It is now well-settled that retrospective cancellation of registration of the supplier, cannot be the sole ground for denying the Input Tax Credit to the purchaser. Apart from holding that the invoice dates were after the effective date of cancellation of the registration certificate of the supplier in question, no other ground has been mentioned by the appellate authority as a ground for denial of Input Tax Credit.

Held: To conclude that the other end dealer is a non-existing dealer, there should be material to show that on the date when the appellants had transaction with him, there was no valid registration. If the cancellation of the registration of the other end dealer is by way of retrospective cancellation, then the question would be as to whether it would affect the transaction done by the appellants, more particularly when the appellants have been able to show that the payments for the transaction have been done through banking challans. The order passed by the appellate authority to be a non-speaking order in the sense that there is no independent finding rendered by the appellate authority qua the allegation against the appellants. Therefore, it is a fit case where the matter should be remanded back to the appellate authority to specifically consider the contentions, which was advanced by the appellants and also the fact that the other end dealer’s registration was cancelled with retrospective effect. For the above reasons, the appeal along with connected application and the writ petition are allowed and the order passed by the appellate authority dated 30th June, 2022 is set aside and the matter is remanded back to the appellate authority for fresh consideration.

Held: These writ petitions are disposed of by remanding these cases to the respondents concerned to consider afresh the cases of the petitioners on the issue of their entitlement of benefit of input tax credit in question by considering the documents which the petitioners want to rely in support of their claim of genuineness of the transactions in question and shall also consider as to whether payments on purchases in question along with GST were actually paid or not to the suppliers (RTP) and also to consider as to whether the transactions and purchases were made before or after the cancellation of registration of the suppliers and also consider as to compliance of statutory obligation by the petitioners in verification of identity of the suppliers (RTP).  If it is found upon considering the relevant documents that all the purchases and transactions in question are genuine and supported by valid documents and transactions in question were made before the cancellation of registration of those suppliers and after taking into consideration the judgments of the Supreme Court and various High Courts which have been referred in this order and in that event the petitioners shall be given the benefit of input tax credit in question.  These cases of the petitioners shall be disposed of by the respondents concerned in accordance with law and in the light of observation made above and by passing a reasoned and speaking order after giving effective opportunity of hearing to the petitioners and by dealing with the judgments petitioners want to rely at the time of hearing of the cases, within eight weeks from the date of communication of this order. 

Held: In the case in hand, petitioner is claiming ITC on the basis of supplies made by Shree Radhey International in the year 2018. Admittedly, only tax invoice was issued by the supplier. The alleged tax to have been charged was never deposited by the supplier and no compliance of Section 16(2)(c) was made. The eligibility and availment of ITC is subject to deposit of tax by supplier which is clear from the reading of sub-section (2)(c). The provision is simple and clear, and there is no ambiguity as regards actual payment of tax by supplier to Government. Once the supplier has not deposited the tax mandated under sub-section (2)(c) of Section 16, the petitioner purchaser cannot claim the benefit. In M/s Solvi Enterprises (supra), the co-ordinate Bench while dealing with Section 16 and 74 of the Act had not noticed the import of sub-section (2)(c) while granting the benefit of ITC on the ground that the registration of the seller dealer was cancelled on the subsequent date when the transaction had admittedly taken place. The petitioner apart from the tax invoice could not bring any document before the taxing authorities in pursuance to the show-cause notice to demonstrate that supplier had supplied the goods and had deposited the tax with the Government as mandated under Section 16(2)(c). This is one of the case where registration of supplier firm was cancelled and on inquiry, it was found that no tax was deposited by supplier with the Government as was required under sub-section (2)(c) of Section 16 before ITC is claimed. Petitioner could not demonstrate before the taxing authorities or before this Court that tax was in fact deposited by supplier pursuant to issuance of tax invoice.

Held: The main contention of the petitioner that the transactions in question are genuine and valid and relying upon all the supporting relevant documents required under law, the petitioner with due diligence verified the genuineness and identity of the supplier and name of the supplier as registered taxable person was available at the Government Portal showing its registration as valid and existing at the time of transaction.  This Court finds that without proper verification, it cannot be said that there was any failure on the part of the petitioner in compliance of any obligation required under the statute before entering into the transactions in question.  The respondent authorities only taking into consideration of the cancellation of registration of the supplier with retrospective effect have rejected the claim of the petitioner without considering the documents relied by the petitioner.  In view of the above, the impugned orders are set aside. The respondent no. 1 is directed to consider the grievance of the petitioner afresh by taking into consideration of the documents which the petitioner intends to rely in support of his claim.

Held - In the case in hand, the proceedings were initiated against the petitioner under Section 74 of the GST Act, 2017 as the registration of the seller dealer has been cancelled on subsequent date i.e. with effect from 29.01.2020, thus, the date of transaction was admittedly took place prior to it i.e. on 06.12.2018.  The record shows that the supplier has filed its returns i.e. GSTR01 and GSTR-3B. It is a matter of common knowledge that after filing of GSTR-01, an auto populated window would be open for filling the GSTR-3B for payment of tax and GSTR-2A can be viewed by the purchaser of the goods in question. Once the said form was generated and the said fact has not been disputed by the authorities below while passing the impugned order, the authorities have failed to consider the fact that GSTR-3B & GSTR-2A, as prescribed under the Act, which was auto populated to which not a single word has been whispered in the impugned orders. On the contrary, an observation has been made against the petitioner that he had failed to bring on record any cogent material that the seller has deposited the tax. At the time when the transaction took place, the purchaser i.e. the petitioner and the seller both were registered, however, at the subsequent time, the seller was found non-existing and the registration of the seller has not cancelled retrospectively i.e. from the date of transaction. Once the seller was registered at the time of the transaction in question, no adverse inference can be drawn against the petitioner. Further, the record shows that the registration of the selling dealer was cancelled retrospectively i.e. w.e.f. 29.01.2020 and not from its inception which goes to show that the transaction between petitioner and seller was registered and having valid registration in his favour. That under the GST regime, all details are available in the GST Portal and therefore, authorities ought to have been verified the same as to whether the filing of GSTR-1A and GSTR-3B, how much tax has been deposited by the seller, but the authorities have failed to do so. Thus, looking to the above facts and circumstances of the cases, the matters require re-consideration.

Held- It is not in dispute that the transactions between the petitioner and the selling dealer, i.e., M/s Unique Trading Company, were held on 26.11.2021 and 30.11.2021. The registration of the selling dealer was cancelled on 08.04.2022. The record further shows that GSTR – 1/1FF and GSTR 3-B were also filed, which shows the returns and tax filed by the selling dealer. Once these facts have been brought on record, the State authorities ought to have verified the same, but instead, proceedings were initiated on the basis of subsequent inspection that the selling dealer was not found at the place of business and adverse view was drawn. This Court in Solvi Enterprises (supra) and R.T. Infotech (supra) has taken the view that when the registration of the selling dealer was cancelled subsequent to the transaction, the same can be verified on GST portal on GSTR – 2A.  Further, paragraph nos. 3.2 & 3.3 of the circular dated 13.12.2023 read as under:- “3.2 In this regard, section 74 (1) of CGST Act reads as follows: (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilized by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax. 3.3. From the perusal of wording of section 74(1) of CGST Act, it is evident that section 74(1) can be invoked only in cases where there is a fraud or wilful mis- statement or suppression of facts to evade tax on the part of the said taxpayer. Section 74(1) cannot be invoked merely on account of non-payment of GST without specific element of fraud or wilful mis-statement or suppression of facts to evade tax. Therefore, only in the cases where the investigation indicates that there is material evidence of fraud or wilful misstatement or suppression of fact to evade tax on the part of the taxpayer, provisions of section 74(1) of CGST Act may be invoked for issuance of show cause notice, and such evidence should also be made a part of the show cause notice. ”  On perusal of the aforesaid paragraphs, it is apparent that proceedings under section 74 can only be invoked when there is a fraud, wilfull mis-statement or suppression of fact to evade tax on the part of the taxpayer. Since the benefit of this circular has been given in view of the judgement of the Apex Court in Suraj Impex (India) Private Limited (supra) and the judgement of this Court in S/s Agrawal Rolling Mills (supra), strict compliance of the circular is required by the State authorities. The record shows that no finding has been recorded at any stage that there is a fraud or willful mis-statement or suppression of fact to evade payment of tax. The record further shows that at the time when the transaction took place, the selling dealer, i.e., M/s Unique Trading Company, was duly registered. The record further shows that the selling dealer has duly uploaded GSTR – 1/1FF and GSTR 3-B. Once, at the time of when transaction took place, the selling dealer was registered, no adverse view should have been taken against the petitioner as held by this Court in Solvi Enterprises (supra) and R.T. Infotech (supra).  In view of the aforesaid facts & circumstances of the case as noted above, the impugned orders cannot be sustained in the eyes of law. The matters require reconsideration.  For the said purpose, the impugned orders passed by the authorities below are hereby quashed. The writ petition is, accordingly, allowed.