SUBHASH SINGH
Versus
DEPUTY COMMISSIONER, STATE GOODS AND SERVICE TAX
Citation: 2024 taxo.online 965
In a recent decision by the High Court of Uttarakhand in the case of Subhash Singh v. Deputy Commissioner, State Goods and Service Tax, the court ruled in favor of the assessee regarding the denial of Input Tax Credit (ITC).
The petitioner, engaged in the retail and wholesale business of iron scrap and waste, had purchased goods with proper invoices and made payments through banking channels, including the payment of applicable GST. However, the suppliers of the petitioner failed to file their GST returns.
The court deliberated on whether proceedings under Section 74 of the Central Goods and Services Tax Act, 2017 could be initiated against the appellant for allegedly availing ITC fraudulently due to the suppliers' non-compliance. The petitioner argued that they had fulfilled their obligation by documenting proper invoices and paying GST, and the responsibility for filing returns lay with the suppliers.
Emphasizing procedural fairness and the statutory framework, the court held that the appellant cannot be penalized for the suppliers' failure to file returns. It was deemed unjust to deny ITC to the petitioner who had acted in good faith and fulfilled all tax payment obligations. The court directed the petitioner to deposit only 10% of the demanded amount, recognizing the petitioner's compliance and mitigating the undue burden caused by the suppliers' non-compliance.
This judgment underscores the importance of distinguishing between the responsibilities of purchasers and suppliers under GST laws, ensuring that genuine transactions are not penalized due to procedural lapses on the part of suppliers. It also highlights the court's role in upholding principles of natural justice and fair play in tax adjudication proceedings.
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