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Input Tax credit can not be denied on Genunine transation with suppliers
In the matter of Sanchita Kundu & Anr. Vs Assistant Commissioner of State Tax
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If the supplier is later discovered to be a fake, ITC cannot be denied to the buyer for a genuine transaction: The High Court
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The petitioner maintains that the status of the supplier was valid on the Government Portal at the time of the transaction, and that the buyer cannot be penalised if the supplier's registration is later cancelled retrospectively by the GST department.
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After appropriate Considering the submission of the parties & on perusal of avilable records with matter under petition, These writ petitions are disposed off by setting aside by Calcutta High Court the aforesaid impugned orders and remanding the petitioners' cases to the respondents officer concerned to consider anew the issue of their entitlement to the ITC in question by considering documents on which the petitioners intend to rely in support of their claim of genuineness of transactions in question, and the respondent concerned shall also consider whether payments on purchase in question were made in good faith.
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If it is ascertained, after verification and consideration of the relevant documents, that all of the purchases and transactions in question are genuine and supported by valid documents, and that the purchases and transactions in question were made before the cancellation of those suppliers' registration, and after considering whether the petitioners' facts are similar to the Supreme Court, various High Courts, and this Court's judgments on which petitioners intend to rely,
Decision in the matter of Sanchita Kundu & Anr. Vs Assistant Commissioner of State Tax - Calcutta High Court
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The Input Tax Credit (ITC) cannot be disallowed on real transactions with suppliers whose GST registration was terminated after the transaction, according to a Calcutta High Court panel led by Justice Md. Nizamuddin.