Case Title: Shyamalmay Paul v. Assistant Commissioner of State Tax, Siliguri Charge & Ors.
Court: Calcutta High Court (Circuit Bench at Jalpaiguri)
Petition Number: WPA 708 of 2025
Category: Input Tax Credit (ITC – Ineligible Claim / Non-existent Supplier)
Date of Judgment: 08 April 2025
Relevant Sections: Sections 16, 50, 73(9) of the CGST/WBGST Act, 2017; Rule 36 of the CGST Rules, 2017
Facts (Paras 1–3)
The petitioner, a registered person under the WBGST Act, had availed Input Tax Credit (ITC) on supplies from Global Bitumen between March 26–28, 2019. The adjudicating authority held the supplier to be non-existent and directed reversal of ITC with interest under Section 50 and penalty under Section 73(9). The appeal before the Additional Commissioner (Appeals), Siliguri, was dismissed on January 20, 2025, affirming the original order.
The petitioner argued that Global Bitumen was validly registered at the time of supply and its registration was later cancelled retrospectively, which is under challenge in another writ. The petitioner also produced tax invoices, e-way bills, RTGS payment proofs, ledger accounts, and GSTR-2A details showing that the supplier had filed GSTR-3B and GSTR-1 for the relevant period.
Questions before the Court (Paras 4–5)
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Whether the authorities erred in disallowing ITC without considering statutory documents evidencing actual supply and payment.
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Whether subsequent retrospective cancellation of supplier registration can invalidate ITC claimed when the supplier was validly registered at the time of supply.
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Whether the authorities were bound to verify whether the supplier had discharged tax liability before denying ITC to the recipient.
Observations (Paras 5–6)
Justice Hiranmay Bhattacharyya observed that the adjudicating and appellate authorities both ignored material evidence such as invoices, e-way bills, and proof of tax payments. They failed to make any factual adjudication on whether the supplier had paid taxes or complied with GST returns. Merely relying on the absence of freight and toll receipts was insufficient when statutory movement documents were on record.
The Court noted that even if supplier registration was later cancelled, the validity at the time of transaction remained undisputed. Authorities must verify supplier compliance under Section 16(2)(c) before branding ITC as ineligible. The failure to perform this statutory verification rendered their conclusions unsustainable.
Judgment (Para 6–7)
The High Court set aside both orders dated January 20, 2025 (appeal) and April 15, 2024 (adjudication), and remitted the matter to the adjudicating authority. It directed a fresh decision after verifying the authenticity of all documents and compliance of both parties under the GST law, within six weeks of receipt of the order.
Summary of Cases Referred
| Sr. No. | Case Name | Court | Principle / Verdict |
|---|---|---|---|
| 1 | Shyamalmay Paul v. Assistant Commissioner of State Tax | Calcutta HC | ITC denial cannot rest merely on freight/toll absence; authorities must verify supplier’s tax compliance and consider all statutory documents. |
Between Fine Lines
For businesses, this ruling reinforces that production of statutory movement documents and tax payment evidence suffices to establish genuine transactions. Tax authorities cannot deny ITC merely on suspicion or absence of minor logistical documents without verifying supplier’s compliance under Section 16(2)(c). Retrospective cancellation of supplier registration does not automatically nullify ITC if the supplier was valid at the time of supply.
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