Can Input Tax Credit Be Denied On The Ground That GST Registration Of Seller Is Cancelled?: Supreme Court To Examine

The Court issued notice in a special leave petition raising such an issue.

​The Bench of Justice JB Pardiwala and Justice KV Viswanathan ordered, “The principal argument of the learned counsel is that ITC cannot be denied solely on the ground that the GST registration of the seller of goods has been cancelled. In other words, goods were purchased by the petitioner herein from a particular party and the GST registration of that party has stood cancelled. In such circumstances, his submission is that the ITC, insofar as the petitioner is concerned, could not have been denied…Issue notice, returnable on 8.12.2025.”

Advocate Vijay Shraff appeared on behalf of the Petitioner.

A writ petition was filed before the Calcutta High Court by the Appellant herein assailing the order of adjudication passed by the Respondents herein. The Respondent-Adjudicating authority conducted a de novo adjudication and passed the order by which the authority has levied tax, interest and penalty under the provisions of the C.G.S.T./W.B.G.S.T. Act.

The High Court declined to grant any relief to the Petitioner on the ground that there is an alternative remedy of going before the Commissioner, GST. Hence, the present leave to appeal was filed before the Supreme Court.

The Appellant had contended before the High Court that with regard to the movement of the goods, the Appellant was able to produce documents, which were available at their end, but, however, the details, as recorded in the Fastag Portal, cannot be accessed by the appellant and in this regard, the Department ought to have co-operated with the appellant and provided necessary details.

The High Court had ordered, “In our considered view, to test the correctness of the impugned order, facts have to be adjudicated much of which is being disputed and denied by the Department. Therefore, we are not persuaded to exercise any discretion in the matter, since, the appellate remedy provided under the Act, is not only an effective remedy, but an efficacious remedy as well. The appellate authority will be able to appreciate the factual position, if necessary, it can call for the records and also direct its office to access the Fastag Portal etc. and all such grounds raised by the appellant can be canvassed before the appellate authority, which will be considered by the appellate authority after giving an effective opportunity of personal hearing to the appellant…Therefore, considering the facts and circumstances of the case, the appellant should not be permitted to bypass the statutory appellate remedy.”

Accordingly, the Supreme Court issued notice in the present leave to appeal.

Cause Title: Roshan Sharma v. Deputy Commissioner of Revenue, State Tax and Anr. (Special Leave to Appeal (C) No. 31296/2025)

Appearances:

Petitioner: Advocate Vinay Shraff, AOR Ravi Bharuka, Advocates Dev Agarwal and Shashank Chamoli