𝐀𝐜𝐭𝐢𝐨𝐧 𝐭𝐚𝐤𝐞𝐧 𝐚𝐠𝐚𝐢𝐧𝐬𝐭 𝐛𝐮𝐲𝐞𝐫 𝐟𝐨𝐫 𝐫𝐞𝐯𝐞𝐫𝐬𝐚𝐥 𝐨𝐟 𝐈𝐓𝐂 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐭𝐚𝐤𝐢𝐧𝐠 𝐚𝐧𝐲 𝐚𝐜𝐭𝐢𝐨𝐧 𝐚𝐠𝐚𝐢𝐧𝐬𝐭 𝐬𝐞𝐥𝐥𝐞𝐫 𝐢𝐬 𝐚𝐫𝐛𝐢𝐭𝐫𝐚𝐫𝐲: 𝐇𝐢𝐠𝐡 𝐂𝐨𝐮𝐫𝐭

LOKENATH CONSTRUCTION PRIVATE LIMITED V. TAX/REVENUE GOVERNMENT

Petitioner:-

The appellant challenged a show-cause notice from GST Authorities, arguing it was issued without verifying the supplier and unjustly denying credit. The appellant had paid tax to the supplier, but some invoices were missing from the GSTR-2A for FY 2017-18.

The High Court ruled that the GST authorities should have first taken action against the supplier before directing the appellant to reverse the input tax credit. They found the authority's actions arbitrary and stated that unless there’s collusion, missing supplier, business closure, or lack of assets, the demand on the appellant is unsustainable.

The court emphasized that without investigating the supplier, penalizing the appellant is illegal. Thus, the appeal is allowed, the previous order and show-cause notice are set aside, and the authorities are directed to first proceed against the supplier.

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