Supplier’s GST Registration Cancelled, No Tax Paid: Allahabad HC Rejects Buyer’s ITC Claim, Refuses to Interfere S. 74 Order

The Allahabad High Court has rejected a buyer's claim for Input Tax Credit (ITC) in a case where the supplier's GST registration was cancelled, and it was found that the supplier had not paid the collected tax to the government. The court upheld the order passed under Section 74 of the CGST Act, refusing to interfere. It emphasized that under Section 16(2)(c) of the Act, the actual payment of tax by the supplier is a mandatory condition for the recipient to avail ITC. The court observed that the buyer bears the responsibility of proving the bona fides of the transaction, which includes ensuring that the tax has been deposited with the government. Since the petitioner could not demonstrate that this condition was met, the court dismissed the plea, reinforcing the strict compliance requirements for claiming ITC.