The court held that input tax credit cannot be denied based on the seller's retrospective registration cancellation when the transaction occurred while the seller was registered.

1. Since the similar issues are involved in aforesaid writ petitions, the same are being decided together by this common judgment.

2. For convenience, the facts of the Writ Tax No.1287 of 2024 is being delineated here-in-below:

3. Heard Sri Aditya Pandey, learned counsel for the petitioner, and Sri RS. Pandey, learned Additional Chief Standing Counsel for the State-respondents as well as Sri Manish Trivedi, learned counsel appearing for the respondent-Bank.

4. By means of this writ petition, the following prayer has been made:-

“I. Issue a suitable writ, order or direction in the nature of certiorari quashing the impugned order dated 20.10.2023 passed by the respondent no.1 in Appeal No.GST – AD091222030324L/2022 F.Y. 2018-19, under the provisions of Section 74 of the U.P.G.S.T./C.G.S.T. Act (Annexure No.1 to the writ petition).

II. Issue a suitable writ, order or direction in the nature of certiorari quashing the impugned order dated 12.09.2022 passed/issued by the respondent no.2 (Annexure no.4 to the writ petition).

III. ………..

IV. ………...”

5. Learned counsel for the petitioner submits that the petitioner is a registered dealer, which is engaged in the business of sale and purchase of scraps etc., against which, proceedings under Section 74 of the UPGST Act were initiated by the respondent no.2 for the tax period December, 2018-19, F.Y. 2018-19 vide notice DRC-01 dated 29.07.2022 to which a detailed reply was submitted by the petitioner, however, without considering the same, the impugned order dated 12.09.2022 was passed in violation of Section 75 (4) of the UPGST/CGST Act. Being aggrieved by the said order, an appeal was filed by the petitioner, which was dismissed vide impugned order dated 20.10.2023.

6. Learned counsel for the petitioner submits that the petitioner purchased the goods from a registered dealer namely M/s. Radhey International (hereinafter referred to as “the seller”), vide tax invoice dated 06.12.2018, which was generated by the seller from the GST Portal.

7. He further submits that the authorities have power under the Act for cancelling the registration with retrospective effect, but in the case at hand, the date of transaction in question is of 06.12.2018 and whereas the registration of the selling dealer has been cancelled with effect from 29.01.2020.

8. The transaction in question is fully covered by the statutory documents prescribed under the Act. He further submits that merely at the subsequent stage, if the selling dealer was not found in a disclosed place of business, or registration has been cancelled, the petitioner cannot be held responsible for the same. He further submits that the selling dealer filed its return therefore, GSTR-2A was auto generated, showing the transaction are genuine. He prays for allowing the writ petition.

9. Per contra, learned Standing Counsel supports the impugned order and submits that the petitioner has failed to bring on record any cogent material about the actual physical motion of the goods and therefore, the impugned order has rightly been passed.

10. In support of his submission, he has placed reliance upon the judgment of the Hon’ble Supreme Court