High Court Stresses Need for Proper Verification; Remands Case of GST Non-genuine Purchases

The Karnataka High Court held that serious GST allegations need proper verification and allegations made against the petitioner, if not verified properly, can impact its financial positions significantly. As petitioner submitted supporting evidence, the case was remanded for fresh review.

The case had begun when the tax authorities sent a summary assessment order to the petitioner under Section 64(1) of the GST Act, raising allegations against the petitioner that it had dealt with bogus suppliers, including M/s MRK Enterprises. This company was claimed to be fake or a shell by the tax authorities because its GST registration was cancelled; also, its premises were found locked, and no real business activity was taking place.

During the hearing before the Karnataka High Court, the petitioner claimed that all the purchases made were genuine. It also furnished additional documents in proof of its claim, including e-way bills, vehicle details, quantity, and transaction records. When the court analysed the entire case, it noted that the allegations made against the petitioner by the tax authorities were really serious. However, also the additional documents submitted by the petitioner were important and were entitled to proper verification. Further, it was noted that ignoring this evidence can cause serious damage to the company’s financial position.

In conclusion to the aforementioned findings, the court remands the case to the tax authorities for fresh consideration. The petitioner has been directed to appear before the Joint Commissioner of Commercial Taxes (Administration), Mysore on May 18, 2026, and submit all the additional documents proving that its suppliers and input tax credit (ITC) claims are genuine. Still, a cost of Rs 25,000 has been levied on the petitioner, with direction to pay the Karnataka Advocates Clerks’ Benevolent Trust, High Court Building, Bengaluru. The tax authorities have also been allowed to take further action under relevant GST provisions after reconsideration.