Cancellation of GST Registration valid where ITC is based on fabricated documents and absence of proof of movement of goods

Last updated: 11 July 2026

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The Madras High Court has ruled that cancelling GST registration is valid when a business claims Input Tax Credit (ITC) based on fabricated documents and cannot provide evidence of the actual movement of goods. Despite being given opportunities, the assessee failed to produce necessary transport documents, leading the court to uphold the cancellation as a necessary measure to prevent fraud against tax revenue.

Court :
Madras High Court

Brief :
The Hon’ble Madras High Court in the case of Tvl. Sri Balajee Udyog vs The Assistant Commissioner (ST) & Ors. [Writ Appeal No.553 of 2026, order dated April 20, 2026] held that cancellation of GST registration under Section 29(2)(a) is valid where the assessee fails to produce evidence of actual movement of goods and claims ITC based on inadequate and unsubstantiated documents, despite being given opportunity of hearing.

Citation :
Writ Appeal No.553 of 2026, order dated April 20, 2026

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Attached File : 671907_6035_tvl_sri_balajee_udyog.pdf

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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