Input Tax Credit cannot be denied without clear evidence of fraud or misstatement; cancellation of supplier registration does not automatically invalidate the purchaser's claims.

JUDGMENT :

PIYUSH AGRAWAL, J.

1. Heard Sri R.R.Agarwal, learned senior counsel assisted by Sri Suyash Agarwal, learned counsel for the petitioner and learned ACSC.

2. Present writ petition has been filed seeking quashing the order dated 20.12.2022 passed by the Additional Commissioner, Grade-2 (Appeal)- II State Tax, Agra, respondent no.1 as well as the order dated 12.1.2022 passed by the Deputy Commissioner, Commercial Tax, Agra, respondent no.2.

3. Learned counsel for the petitioner submits that the petitioner is engaged in trading and manufacturing business, mainly of all kinds of medicines/ pharma products on wholesale basis. He further submits that the petitioner purchased medicines/ pharma products from M/s Unimax Pharma Chem, Purana Taluka Bhiwandi, Thane and at the time of supply it was in existence and duly registered with the GST department as well as Drug License Holder. He further submits that the transaction of purchases made by the petitioner from the Maharashtra Party for the tax period April, 2021 which was against the Tax Invoice dated 30.4.2021 and E-way bill and transport bilty of M/s Vinay Road Lines Pvt. Ltd. He further submits that the whole payments of purchases were made through banking channel and the supplier also submitted his GSTR-1 and GSTR- 3B within the time on GST Portal after making due tax on the turnover made by the supplier.

4. Learned senior counsel for the petitioner further submits that the respondent no.2 issued show cause notice under section 74 of the UPGST Act on the ground that the petitioner has claimed ITC through GSTR-3B for the tax period April, 2021 on the purchase made from M/s Unimax Pharma Chem which has itself got its registration cancelled as such the petitioner has incorrectly claim ITC. He further submits that the petitioner submitted a detailed reply to the show cause notice which has been rejected by the respondent no. 2 on the ground that the recipient purchaser can claim the ITC only when the supplier has deposited the collected tax with the department as per Section 16(2)(c) of the Act. He further submitted that the respondent no. 2 has recorded incorrect finding that the petitioner has not made actual purchases and there was a difference in the bill reflected in GSTR-2A and the bill disclosed by the petitioner.

5. Learned senior counsel further submits that feeling aggrieved by the order passed by the respondent no.2 the petitioner preferred an appeal which has also been dismissed on 20.11.2022 by the respondent no.2 on the ground that the supplier M/s Unimax Pharma Chem in the month of March, 2021 made purchases from different firms who did not deposit the tax, therefore, it claimed forged ITC He further submits that the appellate authority has erred in holding that the purchases made by the supplier from the different firms who did not deposit tax on sales made by them to the M/s Unimax Pharma Chem as such the petitioner cannot claim ITC on the supply made by M/s Unimax Pharma Chem. He further submits that the petitioner has made the payment of Tax as per tax invoices to the supplier and the supplier has deposited the tax as reflected in GSTR-3B, therefore, no adverse inference can be drawn by making RITC to the ITC claimed by the petitioner.

6. Learned senior counsel further submits that specific arguments were raised before the authority which was noticed but no finding has been recorded. He further submits that all materials were produced before the authority and are available before the first appellate authority and the appellate authority as well, have been filed before this Court.