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June 29, 2022

In case of Non Payment of GST by Seller theBuyer shall not be responsible

by CA Shivam Jaiswal in GST, Legal Court Judgement

In case of Non Payment of GST by Seller theBuyer shall not be responsible

Facts and issues of the case

These writ petitions have been filed by the petitioners being aggrieved by the action of the respondent GST concerned denying the benefit of Input Tax Credit (ITC) by their impugned order dated 27th December, 2021 to the petitioner on purchase of the goods in question from the suppliers and asking the petitioners to pay the penalty and interest under the relevant provisions of GST Act, on the ground that the registration of the suppliers in question has already been cancelled with retrospective effect covering the transaction period in question. Petitioner has also challenged the impugned orders dated 29th March, 2022 and 30th March, 2022 respectively being Annexure P-10 to the writ petition, under Section 79(1)(c) of the WBGST Act.

Observation by the court

Considering the submission of the parties and on perusal of records available, these writ petitions are disposed of by setting aside the aforesaid impugned orders and remanding these cases of the petitioners to the respondents officer concerned to consider afresh on the issue of their entitlement of benefit of input tax credit in question by considering the documents which the petitioners intend to rely in support of their claim of genuineness of the transactions in question and the respondent concerned shall also consider as to whether payments on purchase in question along with GST were actually paid or not to the suppliers (RTP) and also to consider as to whether the transactions and purchases were made before or after the cancellation of registration of the suppliers and also to consider as to compliance of statutory obligation by the petitioners in verification of identity of the suppliers (RTP).

If it is found upon verification and considering the relevant documents that all the purchases and transactions in question are genuine and supported by valid documents and transactions in question were made before the cancellation of registration of those suppliers and after taking into consideration as to whether facts of the petitioners are similar to the judgements of the Supreme Court and various High Courts and of this Court upon which petitioners intend to rely and if it is found similar to the present case in that event the petitioners shall be given the benefit of input tax credit in question.

These cases of the petitioner shall be disposed of by the respondents concerned in accordance with and in the light of observation made above and by passing a reasoned and speaking order after giving effective opportunity of hearing to the petitioners, within eight weeks from the date of communication of this order. These Writ Petitions being WPA No.7231 of 2022 and WPA No.7232 of 2022 are disposed of in the light of observation and directions as made above.


The court disposed off the petition and ruled in favour of the petitioner

Read the full order from below


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