M/s Tarun Apparels Pvt. Ltd., registered dealer, purchased readymade garments from M/s Arun Fashion for the purposes of further sale. The purchasing dealer claimed the ITC on such sale. The Assessing Officer disallowed t

On the similar facts of the question, as per the judgment of the Hon'ble Kerala High Court in the case of Diya Agencies vs. State Tax Officer, WP(C) No. 29769 of 2023 dated 12.09.2023 held that where the ITC claimed by the petitioner is bona fide and genuine, the same cannot be denied merely because of the fact that the amount was not reflected in Form GSTR-2A of the petitioner. If the supplier does not remit the amount paid to him by the petitioner, the petitioner cannot be held responsible. In another case decision by Hon'ble Calcutta High Court in the matter of Gargo Traders vs. Joint Commissioner Commercial Taxes (State Tax) [2023]), held that input tax credit cannot be denied to the recipient of goods merely due to retrospective cancellation of the supplier's registration where the recipient is in possession of the relevant tax paying documents and all other conditions for claiming ITC are satisfied. The High Court noted that, at time of transaction, the name of the supplier was already available with the Government's record as a registered taxable person and the petitioner had paid the amount of purchased articles as well as tax on same through bank and not in cash. Consequently, the Court concluded that there was no failure on the part of the petitioner to comply with any statutory obligations before entering into the transactions without proper verification. Hence the dismissal by The Appellate Authority is not justified in the light of case decisions as above.