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IN THE HIGH COURT AT CALCUTTA
HIRANMAY BHATTACHARYYA
Shyamalmay Paul – Appellant
Versus
Assistant Commissioner SGST, Siliguri Charge, Siliguri – Respondent
Judgment :
Hiranmay Bhattacharyya, J.
1. Affidavit of service filed in court today be kept with the record.
2. This application under Article 226 of the Constitution of India is at the instance of a registered person under the WEST BENGAL GOODS AND SERVICES TAX ACT , 2017 (‘WBGST Act, 2017’, for short) and is directed against the appellate order dated May 16, 2025 passed by the Joint Commissioner, State Goods and Services Tax Appellate Authority, Siliguri Circle, Siliguri thereby affirming the order of the Assistant Commissioner, State Goods and Services Tax being the adjudicating authority, Siliguri Charge, Siliguri dated August 29, 2024.
3. A show-cause notice under Section 73(1) of the WBGST Act, 2017 was issued alleging that certain discrepancies were found upon examination of the returns filed for the financial year 2019-2020 and the petitioner was asked to pay tax, interest and other amounts arising from such discrepancies or furnish an explanation for the discrepancies mentioned in the said notice within the time limit indicated in the show-cause notice. Petitioner duly submitted his reply to the said show-cause notice. The Proper Officer being the adjudicating authority passed
Retrospective cancellation of a supplier's GST registration cannot solely deny Input Tax Credit without proper justification and results in a duty on authorities to provide reasoned orders.
The court ruled that retroactive tax demands must be supported by appropriate show cause notices as per statutory requirements; failure to issue such notices invalidates new assessments.
The first respondent was not justified in reversing the ITC availed by the appellant without conducting any enquiry on the supplier and without resorting to any action against the supplier.
Authority must follow prescribed procedures for disallowing input tax credit as per the relevant circular when incorrect GSTIN is declared.
The denial of Input Tax Credit requires verification of the supplier's tax payment, and unilateral action against the recipient without such verification is arbitrary.
The court held that the provisions enabling the denial of Input Tax Credit are within jurisdiction, emphasizing the need for statutory adherence in taxation disputes.
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