Important GST judgement on ITC reversal for default of supplier

Brief details of the judgement-

Case- SUNCRAFT ENERGY PRIVATE LIMITED AND ANOTHER VERSUS THE ASSISTANT COMMISSIONER

Court- Calcutta High court

Issue- Liability of reversal of ITC by recipient for default of supplier.

Judgements considered by Court-

1- Union of India (UOI) Versus Bharti Airtel Ltd. And Ors.

2- Arise India Limited and Ors. Versus Commissioner of Trade and Taxes, Delhi and Ors.

Why a recipient should be liable to pay for the default of supplier?

In this judgement the tingling issue of recovery of ITC from recipient was considered. Many taxpayers are facing the heat. You purchase something, you pay the tax. But after years the department will ask you to reverse ITC. Is it fair to punish the buyer for the fault of supplier.

Facts-

In this case the buyer made the purchase and made the payment of tax to the supplier. The ITC was not reflecting in 2A. The case was of 2017-18. They buyer was lateron asked to make the payment of tax. The buyer approached the court against the proceedings and court decided in the favour of the buyer.

Read the copy –

PDF of the judgement of SUNCRAFT ENERGY PRIVATE LIMITED AND ANOTHER VERSUS THE ASSISTANT COMMISSIONER, STATE TAX, BALLYGUNGE CHARGE AND OTHERS is attached here.