{"id":6722,"date":"2025-11-10T16:31:16","date_gmt":"2025-11-10T11:01:16","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=6722"},"modified":"2025-11-10T16:31:16","modified_gmt":"2025-11-10T11:01:16","slug":"itc-cant-be-reversed-just-because-suppliers-registration-was-later-cancelled-hc","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/itc-cant-be-reversed-just-because-suppliers-registration-was-later-cancelled-hc","title":{"rendered":"ITC Can\u2019t Be Reversed Just Because Supplier\u2019s Registration Was Later Cancelled | HC"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000410231\/subsequent-cancellation-of-supplier-registration-cannot-justify-itc-reversal-or-penalty-where-genuine-purchase-shown-hc\">Singhal Iron Traders vs. Additional Commissioner (2025) 36 Centax 81 (All.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>Piyush Agrawal<\/strong>, J.<\/li>\n<li><strong>Shri Suyash Agarwal<\/strong>, Sr. Adv., for the Petitioner.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The petitioner, a registered trader in iron scrap, had purchased iron scrap from a registered supplier against invoices and e-way bills. The payments were made through banking channels, and the supplier had filed GSTR-1 and GSTR-3B. A show cause notice was issued under Section 74 of the CGST Act, read with the Uttar Pradesh GST Act, proposing reversal of input tax credit and an equal penalty on the ground that the supplier\u2019s registration had subsequently been cancelled. The petitioner submitted that the purchases were genuine, duly supported by documents, and that no irregularity in transportation or payment had been alleged. The matter was accordingly placed before the High Court.<\/p>\n<h2><em>High Court Held<\/em><\/h2>\n<p>The Hon\u2019ble High Court held that the subsequent cancellation of the supplier\u2019s registration could not be a ground to reverse input tax credit or impose penalty where the purchases were supported by e-way bills, banking transactions, and return filings by the supplier. It observed that as GSTR-3B could not be generated without payment of tax and no irregularity in transport was alleged, no adverse inference could be drawn merely due to later cancellation of registration. The Court held that the authorities ought to have verified the supplier\u2019s existence at the time of the transactions and that the orders of reversal and penalty were unsustainable. The impugned orders were quashed, and the writ petition was allowed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Singhal Iron Traders vs. Additional Commissioner (2025) 36 Centax 81&hellip;<\/p>\n","protected":false},"author":8,"featured_media":6730,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,60,189],"tags":[],"class_list":["post-6722","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ITC Can\u2019t Be Reversed Just Because Supplier\u2019s Registration Was Later Cancelled | HC<\/title>\n<meta name=\"description\" content=\"High Court holds ITC reversal and penalty unsustainable when purchases are genuine with e-way bills, banking transactions 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