The petitioner, M/s Himalaya Communication Pvt. Ltd., approached the Himachal Pradesh High Court by way of a writ petition seeking quashing of orders passed by the departmental authorities denying Input Tax Credit (ITC) under the CGST Act. The denial was primarily based on the retrospective cancellation of the supplier’s GST registration.

The petitioner contended that the tax had already been duly paid to the supplier, all statutory documents necessary for availing ITC were in its possession, and the supplier had discharged its tax liability as reflected in the corresponding GSTR-3B returns. Despite these facts, the authorities issued notices under Section 16(2) of the CGST Act without undertaking any examination of the genuineness of the underlying transactions.

The High Court observed that neither the Assessing Authority nor the Appellate Authority had undertaken any factual verification to determine whether the transactions were genuine. The Court emphasized that the mere retrospective cancellation of a supplier’s registration cannot automatically disentitle the recipient from availing ITC. The genuineness of the transaction could only be assessed after examining the relevant documentary evidence, which was admittedly not done in the present case.

Accordingly, the Court held that the impugned orders were unsustainable in law. The orders dated 10.01.2025 and 31.03.2024 were set aside, and the matter was remanded to the Adjudicating Authority with directions to re-decide the issue after duly examining all relevant records and documents. The parties were directed to appear before the authority on the specified date.

The writ petition was thus allowed and disposed of in the above terms.

SOURCE LINK- https://www.mytaxexpert.co.in/uploads/1768213385_mshimalayacommunicationpvtltdvsunionofindiaorso.pdf

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