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2022 (7) TMI 184 - HC - GSTReversal of Input Tax Credit - proper verification of the transactions of selling/purchasing dealers to ensure that there is a match of the details of the transaction or not - HELD THAT:- Section 42(5) of the CGST Act, in terms of which, a reversal of ITC should be a natural consequence in the event of any discrepancy in the claim. Evidently so. However, what is required is that in matters involving claim of ITC, it is incumbent upon the authority to conduct a proper verification of the transactions of selling/purchasing dealers to ensure that there is a match of the details of the transaction, at both ends. This is why Section 42(3) requires the officer to supply the details of the transaction to 'both such persons' to enable such cross-verification - reference may also be made to Circular No.5 of 2021 dated 24.02.2021 issued by the Principal Secretary/Commissioner of Commercial Taxes under the Value Added Tax regime, providing for the procedure to be followed in the case of verification of claims of ITC involving selling/purchasing dealers. The challenge to the notice fails and the petitioner is directed to file its reply to the show cause notice before the Assessing Authority, who, in turn, shall complete the proceedings - Petition disposed off.
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