Where petitioner’s claim for input tax credit was rejected due to supplier’s fraudulent activity, since petitioner had paid amount of purchased articles as well as tax on same through bank and not in cash and without proper verification, it could not be said that there was any failure on the part of petitioner, order rejecting said claim was to be set aside

[2023] 151 taxmann.com 270 (Calcutta) HIGH COURT OF CALCUTTA Gargo Traders v. Joint Commissioner, Commercial Taxes (State Tax)

Input tax credit – Claim of – Petitioner claimed credit of input tax against supply made from a supplier – Said claim was rejected by respondent-revenue on ground that supplier from whom petitioner claimed to have purchased goods were all fake and non-existing and bank accounts open by said supplier was on basis of fake documents – Petitioner had not verified genuineness and identity of supplier – HELD: At time of transaction, name of supplier as registered taxable person was already available with Government record and petitioner had paid amount of purchased articles as well as tax on same through bank and not in cash – Without proper verification, it could not be said that there was any failure on the part of petitioner in compliance of any obligation required under statute before entering into transactions – Therefore, order rejecting said claim of ITC was to be set aside and revenue was directed consider grievance of petitioner afresh by taking into consideration of documents which petitioner intends to rely in support of said claim [Section 16 of Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017][Paras 13 to 19][In favour of assessee]