GST Update

Desk of CA. Praveen Sharma – 1108  Series (CAPS) 

Punjab & Haryana High Court INTHE Case OF  Shaurya Alloys Pvt. Ltd. v. State of Punjab & Anr.

Supplier’s Fraud Cannot Automatically Be Attributed to Buyer: No Mechanical ITC Denial

Outcome: Relief to petitioners through fresh examination; constitutional challenge rejected

No automatic reversal: Supplier cancellation, nil returns or departmental alerts justify inquiry, not mechanical ITC denial.

Buyer’s fraud requires proof: The notice must disclose facts connecting the purchaser with fraud; the supplier’s fraud alone is insufficient.

Prior examination: Officers must examine invoices, periods, default circumstances and supplier-recovery proceedings before issuing notice.

Evidence disclosed: Notices must specify allegations and supply relied-upon documents, subject to lawful privilege.

Buyer’s burden continues: Under Section 155, purchasers must establish eligibility through invoices, receipt, transport and stock records.

 Avoid double recovery: Supplier payments and permissible ITC re-availment must be considered under the applicable statutory framework.

Period-specific law: Later amendments cannot apply retrospectively; buyer registration cannot be cancelled solely because supplier registration was cancelled.

Procedural safeguards: Personal hearing, reasoned consideration of cross-examination requests and specific findings are required.

Fresh decisions directed: Authorities must revisit matters; no fresh coercive recovery until fresh decisions. Existing orders were not quashed, and ITC was not automatically allowed.

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Best Regards,

CA Praveen Sharma

Mob. No. +91-98715 30610