ITC Denial Solely Due to Supplier’s Retrospective GST Cancellation Unjust Without Verifying Transactions’ Genuineness: Himachal Pradesh HC [Read Order]
The authorities failed to examine any documents to ascertain the authenticity of the transaction and had instead proceeded directly to issue notices under Section 16(2) of the CGST Act.
![ITC Denial Solely Due to Supplier’s Retrospective GST Cancellation Unjust Without Verifying Transactions’ Genuineness: Himachal Pradesh HC [Read Order]](https://images.taxscan.in/h-upload/2025/06/19/2050439-itc-gst-cancellation-taxscan.webp "ITC Denial Solely Due to Supplier’s Retrospective GST Cancellation Unjust Without Verifying Transactions’ Genuineness: Himachal Pradesh HC [Read Order]")
The Himachal Pradesh High Court has held that denial of Input Tax Credit ( ITC ) solely on the ground of the supplier’s GST ( Goods and Services Tax ) registration being cancelled retrospectively, without verifying the genuineness of the underlying transaction, is unjustified. The decision was made in response to a writ suit that the petitioner had filed contesting the GST...
The Himachal Pradesh High Court has held that denial of Input Tax Credit ( ITC ) solely on the ground of the supplier’s GST ( Goods and Services Tax ) registration being cancelled retrospectively, without verifying the genuineness of the underlying transaction, is unjustified.
The decision was made in response to a writ suit that the petitioner had filed contesting the GST authorities' rulings that denied ITC for the applicable tax period.
The petitioner, M/s Himalayan Communications had sought quashing of the impugned orders dated 10.01.2025 and 31.03.2024 issued by the Adjudicating Authority and Appellate Authority respectively, arguing that the denial of ITC was arbitrary and failed to consider that the petitioner had duly paid the tax to the supplier and possessed all requisite documents. It was further submitted that the supplier had already discharged its tax liability as evidenced by its GSTR-3B filing for the relevant period.
The Court noted that the sole reason for denial of ITC was the retrospective cancellation of the supplier’s registration, without any enquiry into whether the transaction was genuine.
JusticesTarlok Singh Chauhan and Sushil Kukreja observed that the authorities failed to examine any documents to ascertain the authenticity of the transaction and had instead proceeded directly to issue notices under Section 16(2) of the CGST Act.
Complete Ready to Use PDFs of 200+ Agreements Click here
The matter was remanded back to the Adjudicating Authority, who shall decide the matter after examining all the relevant documents. The parties were directed to appear before the said authority on 20.06.2025.
Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
