A two-judge bench of the Calcutta High Court has held that the transaction cannot be suspected merely on ground that the GST registration of the other-end dealer was cancelled with retrospective effect.
Justice T. S. Sivagnanam and Justice Hiranmay Bhattacharyya were considering a petition by M/s Shraddha Overseas wherein the petitioner challenged the action of the GST appellate authority wherein substantial portion of the transaction have been found by the appellate authority to have been done with valid documentation. However, a doubt had arisen in the mind of the appellate authority with regard to the genuineness of the transaction going by the pay load of the vehicles, which was used for transporting the goods in question.
After noting these facts, the appellate authority observed that the action taken by the tax authorities of Ultadanga wherein two separate enquiries were conducted in the business premises of M/s. Suraj Enterprise and the enquiry was conducted on 14th November, 2019 and 17th February, 2020. Admittedly, the transaction done by the appellant was in October, 2018. Thus, it was concluded that the other end dealer is a non-existing dealer, there should be material to show that on the date when the appellants had transaction with him, there was no valid registration.
If the cancellation of the registration of the other end dealer is by way of retrospective cancellation, then the question would be as to whether it would affect the transaction done by the appellants, more particularly when the appellants have been able to show that the payments for the transaction have been done through banking challans.
Allowing the petition, the division bench observed that “the order passed by the appellate authority to be a non-speaking order in the sense that there is no independent finding rendered by the appellate authority qua the allegation against the appellants. Therefore, it is a fit case where the matter should be remanded back to the appellate authority to specifically consider the contentions, which was advanced by the appellants and also the fact that the other end dealer’s registration was cancelled with retrospective effect. 11. For the above reasons, the appeal along with the connected application and the writ petition are allowed and the order passed by the appellate authority dated 30th June, 2022 is set aside and the matter is remanded back to the appellate authority for fresh consideration after affording an opportunity of personal hearing to the authorised representative of the appellants.”
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