Tag: Allahabad HC

ArticleGST Article

Mandatory Requirement of Written ‘Reasons to Believe’ Under Rule 86A for Blocking Input Tax Credit (ITC)

byCA Bimal Jain

The Hon’ble Allahabad High Court in the case of Pilcon Infrastructure Pvt. Ltd. held that blocking of Input Tax Credit under Rule 86A of the U.P. GST Rules without recording specific, written ‘reasons to believe’ linking the assessee to fraudulent transactions is without jurisdiction and illegal, emphasizing that mere reliance on ex parte communications or generic alerts from DGGI does not fulfil the statutory requirement.

ArticleGST Article

Section 74 of the CGST can be invoked only upon clear demonstration of fraud, wilful misstatement, or suppression of facts with intent to evade tax

byCA Bimal Jain

The Hon’ble Allahabad High Court in the case of SafeconLifescience Private Limited held that proceedings under Section 74 of the UPGST Act cannot be sustained unless there is evidence of fraud, wilful misstatement, or suppression of fact to evade tax. The Court quashed orders passed merely on the basis of unverified intelligence reports and supplier registration cancellation, reiterating the necessity for mens rea and strict compliance with CBIC’s instruction dated December 13, 2023.

ArticleGST Article

No bar of ITC for the buyer when the supply is genuine and supplier was active and registered on  invoice date

byCA Bimal Jain

The Hon’ble Allahabad High Court in the case of M/s Kesarwani Traders v. State of U.P. & Others [Writ Tax No. 1235 of 2025, order dated August 18, 2025] held that subsequent cancellation of the supplier’s GST registration cannot by itself be the ground for denial of ITC if the supplier was registered on the date of invoice and the transaction is genuine, an adverse inference against the buyer was unjustified.