M/s LGW Industries Ltd. & Others v. Union of India & Others

The dispute arose because the GST authorities denied the petitioners the benefit of Input Tax Credit (ITC) on purchases made from certain suppliers. According to the Department, the suppliers were subsequently found to be fake entities and their GST registrations had been cancelled retrospectively covering the period during which the transactions had taken place. Based on these findings, the authorities denied ITC and also initiated recovery proceedings by demanding tax, interest and penalty.

The petitioners challenged both the adjudication order denying ITC and the consequential recovery proceedings, contending that the denial was contrary to law because all purchases were genuine and supported by statutory records.