2026-VIL-974-CAL
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SGST High Court Cases

GST - Denial of Input Tax Credit to bona fide purchaser for default of supplier - Appellant was denied Input Tax Credit on the ground that suppliers had not deposited tax and had not filed GSTR-3B and invoices were not reflected in GSTR-2A of recipients - Whether Input Tax Credit can be denied to bonafide purchaser for default of supplier in depositing tax / non-filing of GSTR-3B / non-reflection of invoice in GSTR-2A - HELD - A bona fide purchaser who has received tax invoices from registered suppliers cannot be denied ITC merely because the supplier has defaulted in depositing tax or filing GSTR-3B - The conditions under Section 16(2)(a) and 16(2)(b) of CGST Act, 2017 are satisfied when purchaser is in possession of tax invoice issued by supplier registered under Act and has received goods or services - The only dispute under Section 16(2)(c) is whether tax charged has actually been paid to Government. The Department itself admits that proceedings have been initiated against defaulting supplier for non-filing of GSTR-3B. Having done so Department cannot doubly recover once from supplier and again from recipients - Department must first proceed for recovery against defaulting supplier under Section 79 of CGST Act. Mere non-reflection of invoices in GSTR-2A cannot by itself lead to automatic denial of Input Tax Credit to bona fide purchaser - The principle laid down in Suncraft Energy Private Limited which has been affirmed by Supreme Court squarely applies to facts of present case – Further, the Section 74 cannot be invoked mechanically merely to cover up the limitation under Section 73(10). The SCN must specifically allege how fraud was inferred or how concealment was detected - Bare invocation of words fraud willful misstatement and suppression of facts without listing out reasons is not sufficient to invoke extended limitation – The impugned is quashed and set aside and Respondents are directed to revisit issue by reconsidering reply with all documents in light of judgments in Suncraft Energy case - Respondent shall pass a reasoned and speaking order in accordance with law after affording opportunity of personal hearing to petitioners – The writ petition is allowed
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