No bar of ITC for the buyer when the supply is genuine and supplier was active and registered on invoice date

Last updated: 11 September 2025

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The Allahabad High Court has ruled that a buyer is entitled to Input Tax Credit (ITC) even if their supplier's GST registration is cancelled retrospectively, provided the transaction was genuine and the supplier was registered at the time of the invoice. The court found that the subsequent cancellation of the supplier's registration cannot be the sole reason to deny ITC if the buyer can prove the transaction's authenticity with proper documentation and evidence of goods movement. In this case, the buyer's ITC was upheld, and the denial orders were quashed.

Court :
Allahabad High Court

Brief :
The Hon'ble Allahabad High Court in the case of M/s Kesarwani Traders v. State of U.P. & Others [Writ Tax No. 1235 of 2025, order dated August 18, 2025] held that subsequent cancellation of the supplier's GST registration cannot by itself be the ground for denial of ITC if the supplier was registered on the date of invoice and the transaction is genuine, an adverse inference against the buyer was unjustified.

Citation :
Writ Tax No. 1235 of 2025, order dated August 18, 2025

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Attached File : 671907_5861_kesarwani_traders.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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