Opportunity of hearing to be granted before denying ITC where sufficient documents are available to show genuineness of the transactions

Last updated: 28 January 2023

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Quick Summary

The Calcutta High Court has ruled that businesses should be given a chance to present their case and supporting documents before their Input Tax Credit (ITC) is denied. This decision came after an assessee's ITC was initially rejected solely because the GST registration of their supplier was cancelled. The court emphasised that if the assessee can provide sufficient evidence of genuine transactions, a proper hearing and consideration of these documents are necessary before a final decision is made.

Court :
Calcutta High Court

Brief :
The Hon'ble Calcutta High Court in Vishal Kumar Arya v. Assistant Commissioner, State Tax, Ultadanga Charge & Ors. [M.A.T. No.2004 of 2022 with I.A. No. CAN 1 of 2022 dated January 20, 2023] directed the assessee, to treat the demand order as Show Cause Notice ("SCN") and submit a reply along with all supporting documents, wherein, the assessee had sufficient documents to show genuineness of the transactions, in a matter denying Input Tax Credit ("ITC") to the assessee on the ground that, the Goods and Services Tax ("GST") Registration of the other end dealer was cancelled. Held that, opportunity should be granted to the assessee and decision should be taken on merits after considering the documents placed.

Citation :
M.A.T. No.2004 of 2022 with I.A. No. CAN 1 of 2022 dated January 20, 2023

Daily Limit Reached