M/S Himalaya Communication PVT LTD vs. The UOI And Others

Held

The High Court held that the denial of Input Tax Credit (ITC) solely based on the retrospective cancellation of the supplier's GST registration, without a proper examination of the genuineness of the transaction, was not justified. The Court found that the Assessing Officer and Appellate Authority had not considered whether the transaction was genuine. The Court emphasized that determining the genuineness of the transaction required examining all relevant documents, which did not appear to have been done. Consequently, the impugned orders were set aside. The matter was remanded back to the Adjudicating Authority to decide afresh after examining all relevant documents. The parties were directed to appear before the Adjudicating Authority on June 20, 2025.

Facts

The petitioner, M/s Himalaya Communication Pvt. Ltd., filed a writ petition challenging orders dated January 10, 2025, and March 31, 2024, passed by respondents No. 3 and 4, respectively. These orders denied the petitioner Input Tax Credit (ITC). The sole reason for denial was the retrospective cancellation of the supplier's GST registration. The petitioner contended that they had paid tax to the seller, possessed all necessary documents for claiming ITC, and the supplier had discharged its tax liability, evidenced by its GSTR-3B filing. The revenue authorities did not appear to have considered the genuineness of the transaction before issuing notices under Section 16(2) of the CGST Act.

Key Issues

1. Whether the denial of Input Tax Credit (ITC) to the petitioner was justified solely on the ground of retrospective cancellation of the supplier's GST registration, without examining the genuineness of the transaction, as per Section 16(2) of the CGST Act? Petitioner's Arguments: The petitioner argued that the denial of ITC was illegal as they had fulfilled all conditions for claiming ITC, including payment of tax to the supplier, possession of requisite documents, and proof of the supplier discharging its tax liability. They contended that the authorities failed to appreciate the factual and legal position. Respondents' Arguments: The judgment records no specific arguments made by the respondents. However, the basis of their action, as stated in the judgment, was the retrospective cancellation of the supplier's GST registration.