Calcutta High Court orders granting of Input Tax Credit
Observes that purchases and transactions made before the cancellation of GST registration were genuine
Calcutta High Court orders granting of Input Tax Credit Observes that purchases and transactions made before the cancellation of GST registration were genuine The Calcutta High Court has directed the tax department to grant Input Tax Credit (ITC) to the petitioners. The court observed that all purchases and transactions in question were genuine and were made before the cancellation of...
Calcutta High Court orders granting of Input Tax Credit
Observes that purchases and transactions made before the cancellation of GST registration were genuine
The Calcutta High Court has directed the tax department to grant Input Tax Credit (ITC) to the petitioners. The court observed that all purchases and transactions in question were genuine and were made before the cancellation of the Goods and Services Tax (GST) registration of the suppliers.
The single bench of Justice Md. Nizamuddin held that the purchases and transactions were supported by valid documents. He took into consideration the judgments of the Supreme Court and various high courts.
The cases of the petitioners would be disposed of by the respondents in accordance with the law and in the light of the observation made by passing a reasoned and speaking order. This would be done after giving the opportunity of hearing to the petitioners and by dealing with the judgments that the petitioners wanted to rely on, within eight weeks, the court said.
Seven petitions were filed assailing the impugned notices issued by the respondents for not allowing ITC to the petitioners on purchase of goods from the suppliers. In addition, the petitioners were asked to pay a penalty and interest under the provisions of the GST Act.
The petitioners challenged the constitutional validity of the Central Goods and Services Tax (CGST)/West Bengal Goods and Services Tax (WBGST) Act. The refusal to grant the benefit of ITC was not on the grounds of non-deposit of tax in the government's account by the suppliers, which was collected from the petitioners, under the CGST/WBGST Act.
The respondents/GST authorities case was based on their inquiry that showed the suppliers from whom the petitioners/buyers claimed to have purchased the goods, were non-existing. Also, the bank accounts opened by those suppliers were on the basis of fake documents. Therefore, the petitioners' claim of ITC was not supported by relevant documents.
The respondents also said that the petitioners had not verified the genuineness and identity of the suppliers who were registered taxable persons (RTP), before entering into any transaction with them.