GST Appellate Tribunal benches at Cuttack and Agra upheld Section 74 demands in two cases, ruling that invoices and bank payments cannot save credit claimed from suppliers found not to exist.

Two benches of the GST Appellate Tribunal (GSTAT) have upheld the denial of input tax credit (ITC) claimed on invoices of suppliers later found to be non-existent, holding that the buyer must prove that the goods were actually received [Ram Niwas Agarwal v. Dhirendra Kumar Parida, 2026-juristway.com-3444-GSTAT(Cuttack)-GST; Prakash Iron Foundry v. Deputy Commissioner, 2026-juristway.com-3460-GSTAT(Agra)-GST].

Ram Niwas Agarwal. Suchismita Misra, Member (Judicial), and Ananda Satpathy, Member (Technical), who wrote the order, heard the appeal of a steel rolling company, represented by its director, which had availed ITC of ₹1,07,712 in September 2020 on two invoices of a supplier found not to exist at its registered place of business. The company produced invoices, e-way bills, weighment slips and bank statements, but not its stock, purchase and sales registers or transport challans. Statements of the supplier’s owner and of the landowner of the declared premises were relied on.

The company relied on On Quest Merchandising India Pvt. Ltd. v. Govt. of NCT New Delhi. The Bench distinguished it as a Delhi VAT case where the transaction itself was not in doubt, and noted that the Supreme Court had since upheld the constitutionality of Section 16(2)(c). Once a supplier with no business at its registered place is shown to have obtained registration by fraud, the Bench held, the recipient’s complicity in claiming credit on its invoices is established, attracting Section 74. It also found that the company had been given adequate opportunity, and dismissed the appeal.

Prakash Iron Foundry. Ajeet Singh, Member (Judicial), who wrote the order, and Vivek Kumar, Member (Technical), dismissed the appeal of a manufacturer of SG iron and cast iron components. It had availed ITC of ₹2,71,252.90 on three invoices worth ₹15,06,960.50 from a Mathura firm that the Special Investigation Branch found non-existent. The Bench noted that no transport bilty, consignment note, weighment slip or GSTR‑2A had been produced. Relying on Allahabad High Court rulings in Shiv Trading Company v. State of U.P. (Writ Tax No. 1421 of 2022) and Ashtha Enterprises (Civil Writ Case No. 10395 of 2023), it held that a buyer must show actual inward supply and payment of tax by the supplier.

In both cases the orders under Section 74, with interest and penalty, were upheld.

2026-juristway.com-3444-GSTAT(Cuttack)-GST | 2026-juristway.com-3460-GSTAT(Agra)-GST