H.C. quashed GST orders for recovery of ITC

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H.C. quashed GST orders for recovery of ITC vide which the revenue cited the non-existence of GST registration of the supplier as their grounds. 

In a significant ruling, the Allahabad High Court has quashed GST orders passed against the appellants concerning transactions dating back to 2018. The company had challenged the validity of tax demand and penalty orders under Section 74 of the GST Act, citing valid registration of its supplier at the time of the transactions. Justice Piyush Agrawal observed that the seller, M/s Radhey International, was a registered GST dealer during the relevant period. Although its registration was later cancelled with effect from January 29, 2020, the Court ruled that this could not be used as grounds to deny input tax credit (ITC) to the appellants including M/s. Solvi Enterprises. The Court criticized the tax authorities for not verifying key GST filings (GSTR-1, GSTR-3B, and GSTR-2A) that supported the legitimacy of the transactions. Citing similar precedents, the judgment emphasized the importance of system-verified documentation in GST assessments. The High Court of Allahabad allowed the writ petitions and the impugned orders were set aside. The matter was remanded back. 

Hon’ble High Court of Allahabad in the case of M/s Solvi Enterprises and others.

Order Date: 24.03.2025


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