Input Tax Credit Cannot Be Denied When Seller’s GST Registration Was Valid During Transaction Despite Later Cancellation

Input Tax Credit Cannot Be Denied When Seller’s GST Registration Was Valid During Transaction Despite Later CancellationCase-LawsGSTThe HC held that the petitioner was entitled to Input Tax Credit (ITC) despite the seller’s GST registration being canceled

Input Tax Credit Cannot Be Denied When Seller's GST Registration Was Valid During Transaction Despite Later Cancellation
Case-Laws
GST
The HC held that the petitioner was entitled to Input Tax Credit (ITC) despite the seller's GST registration being canceled retrospectively. Since the transaction occurred on 06.12.2018 when the seller was validly registered, and the cancellation took effect from 29.01.2020, no adverse inference could be drawn against the petitioner. The Court emphasized that under Sections 16 and 74 of the GST Act and Rule 36 of GST Rules, ITC eligibility depends on conditions fulfilled at the time of transaction. The authorities failed to verify GSTR-1A, GSTR-3B, and tax deposits by the seller. The petition was allowed, and the matter remanded for fresh consideration with a reasoned order after hearing all stakeholders.
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