GST INDIA Biz — Cancellation of GST registration under Sections 29(2)(a), 29(2)(e) of CGST Act, 2017 read with Rule 21(e) of CGST Rules, 2017 on alleged fraudulent ITC. Issue relating to denial of Input Tax Credit under Section 16(2)(c) of CGST Act, 2017 and validity of

Florida Solvent Private Limited v. Superintendent, CGST & Central Excise & Ors.

Date of Order: April 1, 2026

Case Law No: GIB-BHC-2026-34

Subject: Cancellation of GST registration under Sections 29(2)(a), 29(2)(e) of CGST Act, 2017 read with Rule 21(e) of CGST Rules, 2017 on alleged fraudulent ITC. Issue relating to denial of Input Tax Credit under Section 16(2)(c) of CGST Act, 2017 and validity of

Description:

Case Facts:
The petitioner challenged the Order-in-Original dated 04.12.2025 cancelling its GST registration ab-initio.
The allegation was that the petitioner availed fraudulent ITC from suppliers whose registrations were cancelled.
The petitioner contended that relevant documents were furnished and transactions were bona fide, and cancellation was based only on suppliers’ status.

Court Decision:

The impugned order lacked cogent findings on whether ITC was validly availed in the normal course of business.
Mere cancellation of suppliers’ registration cannot by itself justify cancellation of petitioner’s registration.
The authority failed to examine documents and record findings on the alleged illegality of ITC.
The order was arbitrary due to non-application of mind.
The impugned order cancelling GST registration was set aside.
Matter remanded for fresh consideration after granting hearing to the petitioner.
Authorities permitted to continue investigation and take action in accordance with law.
All contentions kept open.

Other Case Law

Sahil Enterprises vs. Union of India & Ors.

Eligibility of Input Tax Credit where supplier fails to deposit tax – Reading down of Section 16(2)(c) of the CGST Act, 2017 – Demand under Section 73 of the CGST Act, 2017.

Facts:The petitioner purchased rubber products from a supplier and paid GST amou...

Shamhu Saran Agarwal and Company vs Additional Commissioner Grade-2 & Others

Whether goods can be detained and penalty imposed under Section 129 GST Act on the ground of undervaluation.

Facts :The petitioner challenged penalty order dated 20.12.2020 and appellate or...

Kanhaiya Nilambar Jha vs. Union of India & Ors.

: Legality of summons and alleged illegal detention during GST inquiry – Sections 69, 70 and 132 of the CGST Act, 2017.

Facts :The petitioner alleged that GST officers illegally detained him from 17.0...