M/S J S INDIA PVT LTD And Anr vs. Assistant Commissioner Of State Tax Bowbazar Charge And Ors

Held

The Court decided to dispose of the writ petition by directing the respondent Authority to reconsider the petitioner's entitlement to the Input Tax Credit (ITC). The Authority is to follow the guidelines laid down in the case of Sanchita Kundu (supra). If the Authority finds that the petitioner's case is similar to the facts and circumstances discussed in the Sanchita Kundu judgment, then the benefit of ITC should be granted to the petitioner. The respondent Authority is required to pass a reasoned and speaking order after giving the petitioner an effective opportunity of hearing. This decision is to be made within a period of eight weeks from the date of communication of the order. The Court did not expressly leave any issue undecided, but the ultimate entitlement to ITC is contingent on the respondent Authority's re-evaluation.

Facts

The petitioner, M/S J S INDIA PVT LTD AND ANR, is challenging an order that denied them the benefit of Input Tax Credit (ITC). The denial was based on the retrospective cancellation of their supplier's GST registration, which covered the period of the transactions. The petitioner contends that at the time of entering into the transactions, they had taken all necessary steps to verify the existence of their supplier and fulfilled all legal obligations. They assert that their supplier was active at the time of the transactions, and therefore, they should not be denied ITC. The petitioner relies on previous judgments from the Calcutta High Court to support their claim.

Key Issues

1. Whether the petitioner can be denied the benefit of Input Tax Credit (ITC) on the ground that their supplier's GST registration was cancelled retrospectively, covering the period of the transactions in question? (Question of law) Petitioner's Argument: The petitioner argues that they should not be denied ITC because they had exercised due diligence in verifying the existence of their supplier at the time of the transactions and had complied with all legal obligations. They contend that the retrospective cancellation of the supplier's registration should not prejudice their claim for ITC, especially when the transactions were genuine and occurred while the supplier was registered. They rely on the decisions in LGW Industries Limited & Ors. vs. Union of India & Ors. and Sanchita Kundu vs. Assistant Commissioner of State Tax, Bureau of Investigation, South Bengal. Revenue's Argument: The judgment does not record any specific arguments made by the State respondents.