The GST Department cancelled the GST Registration of a person. The petitioner in this case had availed the GST Credit on the purchases made by him from that person. The GST Department denied the GST credit of the petitioner on the ground that such person was not genuine and was involved in
Legal Precedence:
LGW INDUSTRIES LTD. VERSUS UNION OF INDIA – HIGH COURT OF CALCUTTA
The GST department denied the GST credit of the petitioner and levied the interest and penalty. The department alleged that the purchase invoices were fake and the bank account of that person did not exist. Petitioner should have verified the genuineness and the identity of the supplier, department said.
1. The petitioner had claimed the ITC for the transaction which he has entered before the cancellation of the supplier’s GST registration. GST authorities refused to grant the benefit of ITC on the grounds of fake invoices and non existence of the bank accounts of the supplier.
2. Petitioner claimed that all the transactions were genuine with supporting documents and with his due diligence he has verified the identity of the supplier on the Government portal showing the registration and its existence at the time of transaction. Petitioner also submitted the statement that they have made the payment of purchase as well as the tax through bank.
While making any transaction, one should always verify the identity and existence of the supplier. Also, if all the transactions made with the supplier are genuine and one has proper documents in place, then even cancellation of the supplier’s GST Registration, would not affect the GST claim of the petitioner.
As the department found the transactions were genuine and all the document supporting it were original, the benefit of the ITC has been granted to the petitioner for transactions entered before the cancellation of the supplier’s GST Registration.
