ITC Cannot Be Denied Solely on the Ground that the Supplier was Subsequently Declared Non-Existent, Without Examining the Documentary Evidence Furnished by the Assessee

Last updated: 23 July 2026

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Quick Summary

The Madras High Court has ruled that tax authorities cannot deny Input Tax Credit (ITC) simply because a supplier was later declared non-existent. The court emphasised that the Revenue Department must examine all documentary evidence provided by the assessee to prove the genuineness of the transaction. If the evidence is insufficient, the assessee should be given an opportunity to submit further proof before any decision is made.

Court :
Madras High Court

Brief :
The Hon’ble Madras High Court in the case of Clear Secured Service Private Limited v. The Assistant Commissioner (ST) [Writ Petition No. 23402 of 2026, order dated July 01, 2026] held that the Revenue Department cannot confirm a tax proposal denying Input Tax Credit (“ITC”) solely on the ground that the supplier was subsequently declared non-existent, without duly examining the documentary evidence furnished by the assessee. Where the documents produced are found insufficient, the assessee must be afforded an opportunity to furnish additional evidence. Accordingly, the assessment order passed under Section 74 of the CGST Act was set aside and the matter was remanded for fresh adjudication.

Citation :
Writ Petition No. 23402 of 2026, order dated July 01, 2026

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