2023 (12) TMI 554 - HC - GST

Input Tax Credit - credit availed on the basis of invoices issued by the suppliers whose registrations were cancelled retrospectively - interest not paid while tax payment in cash during the months of April, May, July and November 2018 and March 2019 was delayed - HELD THAT - Revenue though tried to justify the impugned notice, but did not produce any document to demonstrate that the registration of any of the firms was ever cancelled during the assessment year 2018-19 either in the form of averments or in the form of attached documents. During the course of arguments it is transpired that admittedly there is no express/physical letter by the respondents on record showing cancellation of the registration of any of the dealers / suppliers in question retrospectively particularly for relevant assessment year 2018-19. Under such circumstances, nothing survives in the show cause notice to address upon on merits - the impugned notices (Annexure P/1 and P/3) to that extent are hereby quashed - petition disposed off.

Summary

Issues involved:
The issues involved in this case include the availing of Input Tax Credit based on invoices from suppliers whose registrations were cancelled retrospectively, and the failure to pay interest for delayed tax payments.

Availing Input Tax Credit based on cancelled registrations:
The petitioner, engaged in trading, applied for Input Tax Credit with invoices from various suppliers. The respondent issued a show cause notice citing discrepancies, alleging that the petitioner availed ITC based on invoices from suppliers with cancelled registrations. The petitioner denied this and requested a list of dealers whose registrations were cancelled. The respondent failed to provide evidence of registration cancellations for the relevant assessment year, leading the court to quash the notice due to lack of supporting documentation.

Failure to pay interest for delayed tax payments:
The second issue in the show cause notice pertained to the failure to pay interest amounting to Rs. 65 for delayed tax payments. The court found this point to be of minimal relevance and related solely to the delay in filing returns. The petitioner's counsel argued that the Revenue should provide details upon request as per relevant GST rules, seeking the quashing of the notice. The respondent contended that transactions with dealers whose registrations were cancelled retrospectively would render the business illegal, thus justifying the notice. However, without evidence of registration cancellations, the court quashed the notice and allowed for a fresh notice with specific details if necessary.

Separate Judgement:
No separate judgment was delivered by the judges in this case.