M/s. D.Y. Beathel Enterprises v. State Tax Officer (Data Cell) & Another

INTRODUCTION

M/s. D.Y. Beathel Enterprises, a registered dealer engaged in the business of raw rubber sheets, purchased goods from registered suppliers, namely Mr. Charles and Mrs. Shanthi. The petitioner paid the entire sale consideration, including GST, mainly through banking channels and availed Input Tax Credit (ITC) based on valid tax invoices issued by the suppliers.

During an inspection, the State Tax Department found that the suppliers had collected GST from the petitioner but had failed to remit the tax to the Government. Instead of initiating recovery proceedings against the suppliers, the Department issued show cause notices to the petitioner and proposed reversal of the ITC already availed.