Denial of Credit on Ground of Non-Existent Supplier is not Valid as Purchase was Made: Chattisgarh HC [Read Order]

The Chhattisgarh High Court has held that denial of credit on the ground of a non-existent supplier is not valid as purchases were made.

Sri Balaji Metals and Minerals Private Ltd, the petitioner is a manufacturer-dealer who received services from a service provider. The registration of the service provider came to be cancelled retrospectively. It was submitted that the petitioner had abode certain services from the supplier in the year 2018-19 and the outward tax return i.e. tax paid by such supplier was shown in the portal of the Goods and Services Tax (G.S.T.).

The petitioner filed the services and filed the inward return also shows the said tax has been paid. Since the outward return filed by the supplier shows the payment of tax as such the petitioner was entitled to the input tax credit. He would submit in the meanwhile, on the ground that the supplier is non-existent.

Notices have been issued both by the Central Goods and Services Tax (C.G.S.T.)  and Directorate General of Goods and Services Tax Intelligence (D.G.G.I.). The petitioner contended that dual action is illegal and the denial of credit on the ground that the supplier is non-existent entity is not correct as purchases were made in 2018-2019.

 Further argued that no reasons to believe exist under section 67 read with section 70 which cannot permit roving enquires in place of statutory audit under section 65.

The Court comprising Justice Goutam Bahduri and Justice Sanjay Kumar Jaiswal considered prima facie that tax paid is shown on the GST portal of the petitioner and directed by way of interim relief, no further orders to be passed.

To Read the full text of the Order CLICK HERE

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