Can purchasing dealer be denied ITC for non-payment by supplier?’; Reduces deposit

Subhash Singh vs. Deputy Commissioner, SGST

Uttarakhand HC citing appeal provisions modifies assessment order to the extent that “appellant will deposit 10% of the amount, which is being demanded by the respondents”; A demand of about Rs. 79 lakhs was raised by the Deputy Commissioner, SGST which was decreased to about Rs. 46 lakhs in the show cause notice and further to about Rs. 19 lakhs in the order; Assessee is into retail and wholesale business of iron scrap and waste; It purchased goods with proper invoices, and made proper payments through banking channels along with applicable GST coupled with recording of details of the invoices and the payment in its books of accounts; HC ruling in favour of assessee (the purchasing dealer) posits twin queries “If the appellant’s suppliers committed a default, can the purchasing dealer be made to bear the consequences of denying the ITC” and “If the suppliers have not filed their returns, then proceedings under section 74…cannot be initiated against the appellant for availing the benefit of ITC in a fraudulent manner”;  As for non-filing of returns HC noting that supplier has neither paid the tax nor files returns clarifies that it is ‘duty’ of the supplier to file returns; Accordingly, disposes of appeal.