ITC cannot be denied to recipient without due investigation of supplier: Calcutta HC

The Calcutta High Court ruled in the case of Suncraft Energy Private Limited and Another vs. Assistant Commissioner, State Tax that Input Tax Credit (ITC) cannot be denied to the recipient without proper investigation of the supplier.
The dispute arose when Suncraft Energy Private Limited was issued a demand notice for reversing ITC claims based on discrepancies between their GSTR 2A and GSTR 3B ITC.
However, the court found that no investigation was carried out against the supplier.
The court emphasized that before directing the recipient to reverse ITC claims, tax authorities must investigate the actions of the supplier.
The ruling provides clarity on the denial of ITC without proper investigation and highlights the need for thorough inquiries into supplier actions before taking action against recipients.