Judicial Corner: State authority cannot blindly rely on Central verification report to deny ITC; fresh order directed – Calcutta High Court (10.09.2025)

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State authority cannot blindly rely on Central verification report to deny ITC; fresh order directed – Calcutta High Court {R.P. Techsoft International Pvt. Ltd. V/s Dy. Comm. of Revenue (2025) 33 Centax 237 (Cal.)}

Facts:

  • Petitioner’s ITC was denied by the State Tax Authority.
  • The denial was based solely on the verification report of the Central Tax Authority.
  • Though the petitioner was given a chance to submit a rebuttal, the authority did not independently examine the matter or consider the petitioner’s objections.

Issue:

  • Whether the State Tax Authority can blindly rely on the verification report of the Central Tax Authority to deny ITC, without taking an independent decision.

Held:

  • The State Authority cannot treat the Central verification report as binding it is only an input/information.
  • A copy of the report must be furnished to the dealer, and objections must be duly considered.
  • Since the authority failed to independently apply its mind and ignored the rebuttal, the order violated natural justice.

The matter was remanded for fresh decision as per Sec. 140 of the CGST Act, 2017.