Case Of: M/S Singhal Iron Traders
Issued By: Allahabad High Court
Order No: WRIT Tax No. – 1357 of 2022
Date: 4th Nov 2025
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The petitioner, M/s Singhal Iron Traders, engaged in the business of trading iron scrap, purchased goods in August 2018 from M/s Arvind Metal Suppliers, Nunhai, Agra – a GST-registered supplier at that time. The purchases were supported by valid tax invoices and e-way bills, and payments were made through regular banking channels.
The supplier had duly filed GSTR-1 and GSTR-3B returns for the corresponding tax period, establishing that the outward supplies were reported and tax was discharged to the government.
Subsequently, the department noted that the supplier’s GST registration had been cancelled w.e.f. 31.01.2019 and initiated proceedings under Section 74 of the CGST/UPGST Act, 2017 against the petitioner, alleging purchases from a non-existent supplier.
Despite furnishing comprehensive documentation – including invoices, e-way bills, proof of payment, and copies of returns – the adjudicating authority rejected the explanation and directed reversal of ITC along with penalty, solely on the basis of the supplier’s later registration cancellation.
The Allahabad High Court observed that the supplier was a registered person under GST during the relevant transaction period, and subsequent cancellation of registration could not retrospectively invalidate genuine transactions carried out while registration was active.
The Court held that the petitioner had fulfilled all substantive conditions of Section 16(2) of the CGST Act – possessing valid tax invoices, receipt of goods, payment through banking channels, and verification through e-way bills.
It was also noted that the department had not alleged any fraud, misrepresentation, or connivance on the part of the petitioner, and no factual verification was made to establish that the supplier was non-existent at the time of transaction.
Concluding that the proceedings under Section 74 were unwarranted, the Court quashed the impugned orders and ruled that denial of ITC merely on account of post-facto registration cancellation was legally unsustainable.