ORDER : BHARGAV D. KARIA, J. 1. Heard learned advocate Mr. Sahil Rao appearing for the petitioner and learned Assistant Government Pleader Ms. Shrunjal Shah for the respondents. 2. By this petition under Article 227 of the Constitution of India, the petitioner has challenged the Order-in-Original dated 23.1.2025 passed under Section 74 of the Gujarat Goods and Service Tax Act, 2017 (hereinafter referred to as ‘GST Act’ for short) by the Assistant Commissioner, Ghatak-21 (Ahmedabad) Range-6, Division-2, Gujarat. 3. Brief facts of the petition are as under: 3.1 The petitioner, a Partnership Firm, is engaged in the business of manufacturing and trading of Ferrous and Non-Ferrous Metal and Scrap. The petitioner Firm is registered with the GST Department since 1.7.2017. 3.2 Respondent No.1, the Assistant Commissioner Ghatak-21, Ahmedabad issued intimation in Form DRC-01A dated 22.7.2024 as per Rule 142(1A) of the Central/ State Goods & Service Tax Rules, 2017 (for short ‘GST Rules’). 3.3 As per the intimation, it was alleged that the petitioner had purchased goods during the Financial Year 2017-18 from various vendors whose registration had been cancelled suo-motu on retrospective basis and hence the Input Tax Credit availed by the petitioner was supposed to be reversed as per the provisions of Section 16 (2)(c) of the GST Act. 3.4 Respondent No.1, thereafter, issued show- cause notice dated 30.7.2024 in FORM GST DRC- 01 reiterating the facts narrated in the notice in FORM GST DRC-01A. 3.5 The petitioner filed reply on 7.8.2024 in FORM GST DRC-06 providing information and documents such as Invoices, E-way bills, Lorry Receipts, Way-slips, Ledger Account so as to establish that the petitioner had made bonafide purchases along with payment of GST on such purchases and, therefore, no disallowance can be made on the failure of the payment of tax, if any, at the ends of the suppliers. It was also contended that the allegation with respect to ineligible ITC is based on retrospective cancellations of GST registration of vendors of the petitioner but the same were active at the time of making purchases and hence neither disallowance of ITC can be made nor the petitioner may be asked to reverse such ITC availed by the petitioner. It was also contended that the allegation with respect to ineligible ITC is based on retrospective cancellations of GST registration of vendors of the petitioner but the same were active at the time of making purchases and hence neither disallowance of ITC can be made nor the petitioner may be asked to reverse such ITC availed by the petitioner. 3.6 Thereafter, the impugned Order-in- Original FORM GST DRC-07 dated 23.1.2025 was passed after considering reply filed by the petitioner wherein it is stated that the cancelled vendor was found to be bogus and hence Input Tax Credit availed qua cancelled vendors of the petitioner is liable to be reversed under Section 16 (2)(c) of the Act. 3.7 The petitioner has also challenged the vires of Section 16 (2)(c) of the GST Act as the petitioner was a bonafide purchaser. 4. Learned advocate Mr. Sahil Rao for the petitioner submitted that the reply of the petitioner is not considered at all or dealt with and respondent No.1 has passed a premeditated and one-sided order without giving any opportunity of hearing to the petitioner. It was further submitted that the petitioner ought to have been provided with the relied upon documents in form of cancellation orders passed in case of its vendors and further opportunity of cross- examination ought to have been provided to the petitioner in consonance with the principle of natural justice. 4.1 It was further submitted that the show- cause notice is also cryptic without alleging what is referred in the Order-in-Original. It was submitted that the vendors are from outside the State whose registration was cancelled and only because the cancellation is reflected on the portal, the respondent authority without verification as to the subsistence of such registration at the time of purchase made by the petitioner was there or not, has committed an error in passing the impugned Order-in-Original or disallowance of ITC availed by the petitioner. It was further submitted that respondent authorities did not provide any detail with regard to the cancellation of the registration of the various suppliers to the petitioner and in absence of such details, the impugned Order- in-Original is liable to be quashed and set-aside. It was further submitted that respondent authorities did not provide any detail with regard to the cancellation of the registration of the various suppliers to the petitioner and in absence of such details, the impugned Order- in-Original is liable to be quashed and set-aside. 4.2 It was further reiterated that merely because registration of the vendors have been cancelled, it would not call for automatic reversal of the Input Tax Credit of the petitioner, more particularly when the petitioner is a bonafide purchaser and when material is placed on record in form of invoices, Eway-bills, Lorry Receipts, Way- slips ledger Accounts, etc. by the petitioner and, therefore, the impugned order is not tenable in the eyes of law. 4.3 In support of his submission, reliance was placed on the decision of this Court in case of Mahadev Enterprise v. State of Gujarat and Another , reported in (2016) SCC OnLine Guj 8893 , wherein this Court while examining the applicability of Section 11 (5)(mmmm) of the Gujarat Value Added Tax Act, 2003 (for short ‘the GVAT Act’) has held that even if the cancellation of registration of selling dealer is retrospective in effect or is cancelled ab- initio, insofar as the purchasing dealer is concerned, input tax credit cannot be denied to him till the publication of the name of the dealer under Section 27 (11) or Section 97 of the GVAT Act. 4.4 It was submitted that similarly under the GST Act, respondent No.1 could not have ordered to disallow the reversal of ITC only because of the cancellation of the registration of the suppliers of the petitioner retrospectively or ab-initio. 4.5 In support of his contention that not providing of relied upon documents and opportunity of cross-examination results in violation of principles of natural justice, reliance was placed on the following decisions: i) In case of State of Kerala v. K.T. Shaduli Grocery Dealer Etc. 4.5 In support of his contention that not providing of relied upon documents and opportunity of cross-examination results in violation of principles of natural justice, reliance was placed on the following decisions: i) In case of State of Kerala v. K.T. Shaduli Grocery Dealer Etc. , reported in (1977) 2 SCC 777 wherein the Hon’ble Apex Court considering the proviso to Section 17(3) of the Kerala Sales Tax Act held that opportunity of being heard include the right to cross-examination, examining witnesses relied upon by the adjudicating authority, and not granting of opportunity of being heard would result in violation of principles of natural justice, as in view of the proviso to Section 17(3) which provides that before taking any action under the said Section, dealer shall be given a reasonable opportunity of being heard and where a return has been submitted to prove correctness and completeness of such return, the Hon’ble Apex Court further held that in order to prove and to establish the correctness and completeness of the return by any mode permissible in law would recognise for providing the fact by production of evidence and evidence includes oral evidence of witnesses and opportunity to prove the correctness or completeness of the return would, therefore, necessarily carry with it the right to examine witnesses and that would include equally the right to cross-examine witnesses examined by the Sales Tax Officer. It was therefore submitted that infraction of the right conferred on the assessee by the second part of the proviso would vitiate the order of assessment made against the assessee. Learned advocate Mr. Rao, therefore, submitted that opportunity of being heard would not be said to be complete unless in the circumstances of the case the petitioner was allowed to cross-examine the witnesses as per the relied upon documents by the respondent authorities. ii) Reliance was also placed on the decision of Biecco Lawrie Limited and Another v. State of West Bengal and Another , reported in (2009) 10 SCC 32 wherein the Hon’ble Apex Court while considering the lacuna in the departmental inquiry under Labour Law has held as under: “18. The principle of natural justice is attracted whenever a person suffers a civil consequence or a prejudice is caused to him by an administrative action. The principle of natural justice is attracted whenever a person suffers a civil consequence or a prejudice is caused to him by an administrative action. In other words principle of natural justice is attracted where there is some right which is likely to be affected by any act of the administration including a legitimate expectation(See: Ashoka Smokeless Coal India (P) Ltd. v. Union of India & Ors. The procedure to be followed is not a matter of secondary importance and in the broadest sense natural justice simply indicates the sense of what is right and wrong (Voinet v. Barrett (1885) 55 LJQB 39) and even in its technical sense it is now often equated with fairness. As a well-defined concept, it comprises of two fundamental rules of fair procedure that- a man may not be a Judge in his own cause (nemo judex in re sua) and that a man's defence must always be fairly heard. xxx xxx xxx xxx 20. The instant case might appear to be a case of departmental bias as it is persistently lodged by the respondent that the enquiry Officer was biased being a company lawyer and had favoured the company in causing miscarriage of justice. Departmental bias arises when the functions of a Judge and the prosecutor are combined in the same department as it is not uncommon to find that the same department which initiates the matter also decides it, therefore, at times, department fraternity and loyalty militates against the concept of fair hearing. xxx xxx xxx xxx 24. It is fundamental to fair procedure that both sides should be heard - audi alteram partem, i.e., hear the other side and it is often considered that it is broad enough to include the rule against bias since a fair hearing must be an unbiased hearing. One of the essential ingredients of fair hearing is that a person should be served with a proper notice, i.e., a person has a right to notice. Notice should be clear and precise so as to give the other party adequate information of the case he has to meet and make an effective defence. Denial of notice and opportunity to respond result in making the administrative decision as vitiated. 25. The adequacy of notice is a relative term and must be decided with reference to each case. Notice should be clear and precise so as to give the other party adequate information of the case he has to meet and make an effective defence. Denial of notice and opportunity to respond result in making the administrative decision as vitiated. 25. The adequacy of notice is a relative term and must be decided with reference to each case. But generally a notice to be adequate must contain the following: (a) time, place and nature of hearing; (b) legal authority under which hearing is to be held; c) statement of specific charges which a person has to meet. 26. However in The State of Karnataka & Anr. v. Mangalore University Non-Teaching Employee's Association & Ors. [ (2002) 3 SCC 302 ] the requirement of notice will not be insisted upon as a mere technical formality when the party concerned clearly knows the case against him and is not thereby prejudiced in any manner in putting up an effective defence, then violation of the principle of natural justice cannot be insisted upon. xxx xxx xxx xxx 31. A proper hearing must always take in its ambit a fair opportunity to those who are parties in the controversy for correcting or contradicting anything that is prejudicial to their view. Lord Denning has observed the following in Kanda v. Government of Malaya [1962] AC 322 - "If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence has been given and what statements have been made affecting him and then he must be given a fair opportunity to correct or contradict him." 32. Thus every person before the administrative authority exercising adjudicatory powers has the right to know the evidence to be used and this was firmly established in the case of Dhakeshwari Cotton Mills Ltd. v. Commissioner of Income Tax [ AIR 1955 SC 65 ]. 33. It is, however, very well accepted principle that supply of the adverse material need not be, unless the law otherwise provides, in its original form and it is sufficient if the summary of the contents of the material is supplied provided it is not misleading. 33. It is, however, very well accepted principle that supply of the adverse material need not be, unless the law otherwise provides, in its original form and it is sufficient if the summary of the contents of the material is supplied provided it is not misleading. Thus, what is essential is substantial fairness and this may be in many situations be adequately addressed and achieved by telling the affected party the substance of the case that he has to meet, without precisely discussing the precise evidence or the sources of information. iii) Learned advocate Mr. Rao referred to and relied upon the decision of Apex Court in case of Kishinchand Chellaram v. Commissioner of Income-tax , reported in (1980) 125 ITR 713 (SC) wherein the Hon’ble Apex Court while considering the decision of the Tribunal for not showing letter of the Bank Manager to the assessee to treat the amount as income from undisclosed source and has held as under: “5. The sole question which arises for determination in the appeal is whether there was any material evidence to justify the findings of the Tribunal that the amount of Rs. 1,07,350 said to have been remitted by Tilokchand from Madras represented the undisclosed income of the assessee. The only evidence on which the Tribunal could rely for the purpose of arriving at this finding was the letter dated 18-2-1955 said to have been addressed by the Manager of the bank to the ITO. Now it is difficult to see how this letter could at all be relied upon by the Tribunal as a material piece of evidence supportive of its finding. In the first place, this letter was not disclosed to assessee by the ITO and even though the AAC reproduced an extract from it in his order, he did not care to produce it before the assessee or give a copy of it to the assessee. In the first place, this letter was not disclosed to assessee by the ITO and even though the AAC reproduced an extract from it in his order, he did not care to produce it before the assessee or give a copy of it to the assessee. The same position obtained also before the Tribunal and the High Court and it was only when a supplemental statement of the case was called for by this Court by its order dated 16-8-1979 that, according to the ITO, this letter was traced by him and even then it was not shown by him to the assessee but it was forwarded to the Tribunal and it was for the first time at the hearing before the Tribunal in regard to the preparation of the supplemental statement of the case that this letter was shown to the assessee. It will therefore be seen that, even if we assume that this letter was in fact addressed by the manager of the bank to the ITO, no reliance could be placed upon it, since it was not shown to the assessee until at the stage of preparation of the supplemental statement of the case and no opportunity to cross-examine the manager of the Bank could in the circumstances be sought or availed of by the assessee. It is true that the proceedings under the Income Tax law are not governed by the strict rules of evidence and therefore it might be said that even without calling the Manager of the Bank in evidence to prove this letter, it could be taken into account as evidence. But before the Income Tax Authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the statements contained in it by asking for an opportunity to cross examine the Manager of the Bank with reference to the statements made by him. Moreover, this letter was said to have been addressed by the Manager of the Bank to the ITO on 18-2-1955 in relation to a remittance alleged to have been sent on 16-10-1946 and it is impossible to believe in the absence of any evidence to that effect, that manager who wrote this letter on 18-2-1955 must have been in-charge of the Madras Office on 16- 10-1946 so as to have personal knowledge as to who remitted the amount of Rs. 1,07,350. 1,07,350. What the Manager of the Bank wrote in this letter could not possibly be based on his personal knowledge and it does not appear from the letter as to what were the original documents and papers from which he gathered the information conveyed by him to the ITO. The statements contained in this letter addressed by the Manager of the Bank to the ITO were in the nature of hearsay evidence and could not be relied upon by the Revenue authorities. The Revenue authorities could have very well called upon the manager of the Bank to produce the documents and papers on the basis of which he made the statements contained in his letter and confronted the assessee with those documents and papers but instead of doing so, the Revenue authorities chose to rely merely on the statements contained in the letter and that too, without showing the letter to the assessee. There is also one other important circumstance which deserves to be noted. It appears that when the letter dated 9-3-1957 was addressed by the manager of the Bank to the assessee, a copy of it was forwarded by the manager to the ITO and this copy contained the following endorsement:- "Copy to Mr. T. K. Surendran, 2nd Income-tax Officer, Income-Tax Office, C-IV Ward, Bombay for information with reference to his summons dated 5-3- 1957. Only one T. T. for Rs. 1,07,350 was received with particulars as above. Mr. Nathirmal was identified by Mr. B. N. Mallaya, the then Officer in our office." This copy of the letter dated 9-3-1957, was obviously in the record of the ITO but it was not disclosed to the assessee at any stage and according to the ITO, it was not traceable until the case came back to him for evidence in connection with the preparation of the supplemental statement of the case. He then seemed to trace it and forwarded it along with his report to the Tribunal and it was at the hearing before the Tribunal in connection with supplemental statement of the case that it was shown to the assessee for the first time. He then seemed to trace it and forwarded it along with his report to the Tribunal and it was at the hearing before the Tribunal in connection with supplemental statement of the case that it was shown to the assessee for the first time. It is difficult to understand how this copy of the letter dated 9-3-1957 as also the letter dated 18-2-1955 said to have been addressed by the Manager of the Bank to the ITO were not traceable in the records of the ITO all this time and they came to be traced only when the supplemental statement of the case was called for by this Court. There is no explanation given by the Revenue as to why these two important documents were not traceable and they were not disclosed to the assessee. The reason perhaps was, and this was the suggestion made by the learned counsel appearing on behalf of the assessee, that the Revenue authorities did not wish to give an opportunity to the assessee to call the manager of the Bank for cross-examination, lest the edifice which they wanted to construct for taxing the assessee on the amount of Rs. 1,07,350 might be jeopardised. It is interesting to note that the endorsement made at the foot of the copy of the letter dated 9-3-1957 sent to the ITO clearly shows that the Manager of the Bank was served by the ITO with a summons dated 5-3-1957 and one can reasonably presume that the Manager of the Bank must have appeared in answer to the summons before the ITO and given his statement. But no such statement has been produced by the Revenue authorities nor are we told as to what happened when the Manager of the Bank appeared in obedience to the summons. It is impossible to believe that the Manager of the Bank should have failed to appear before the ITO in answer to the summons and there is no doubt that his statement must have been recorded. The question then is, why has this statement been kept back by the Revenue authorities ? It is impossible to believe that the Manager of the Bank should have failed to appear before the ITO in answer to the summons and there is no doubt that his statement must have been recorded. The question then is, why has this statement been kept back by the Revenue authorities ? Even if we assume that the ITO did not record the statement of the Manager of the Bank, it is difficult to appreciate why he should not have done so and probed into the matter further with a view to finding out what was the basis on which the manager had made the statement that the remittance was sent by the assessee. We are clearly of the view that the letters dated 18-2-1955 and 9- 3-1957 did not constitute any material evidence which the Tribunal could legitimately take into account for the purpose of arriving at the finding that the amount of Rs. 1,07,350 was remitted by the assessee from Madras, and if these two letters are eliminated from consideration, it is obvious that there was no material evidence at all before the Tribunal which could support this finding. iv) Reliance was also placed on the decision of the Apex Court in case of Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax , reported in (1954) 26 ITR 775 (SC) , which is followed by the Apex Court subsequently in the above decisions. The Hon’ble Apex Court in the facts of the said case has in turn relied upon the decision of the Lahore High Court in case of Seth Gurmukh Singh v. Commissioner of Income Tax reported in (1944) 12 ITR 393 (Lah) to provide opportunity of hearing to the assessee while disclosing about the information relied upon to frame the assessment. v) Learned advocate Mr. v) Learned advocate Mr. Rao has also referred to and relied upon the decision of the Hon’ble Calcutta High Court in case of Suncraft Energy (P) Ltd. v. Assistant Commissioner, State Tax, reported in (2023) 153 taxmann.com 81 (Calcutta) wherein the Hon’ble Calcutta High Court relied upon the clarification issued as per the press release dated 18.10.2018 wherein it is clarified that there shall not be any automatic reversal of Input Tax Credit from buyer on non-payment of tax by the seller and in case of the default in payment of tax by the seller, recovery shall be made from the seller, however, reversal of credit from buyer shall also be an option available with the revenue authorities in exceptional circumstances. 5. Having heard learned advocate for the petitioner and on perusal of the impugned show-cause notice as well as the Order-in- Original and the reply filed by the petitioner before adjudicating authority, it appears that the adjudicating authority relying upon the information available that the suppliers of the petitioner are bogus and registration of the suppliers having been cancelled, has made disallowance of ITC while invoking Section 74 of the GST Act read with Section 20 of the IGST Act by raising a demand of Rs.1,23,89,426/-. 6. The contention of the petitioner with regard to breach of the principle of natural justice, however, is not borne out from the impugned order as the petitioner has filed a detailed reply to the show-cause notice along with the various documents including the Invoices, E-way bills, Lorry Receipts, E way- bills, Ledger Account, etc. which requires further verification and merely because the same are not referred to in the impugned Order-in-Original, the same would not result into breach of the principles of natural justice. 7. Moreover, the impugned Order-in-Original refers to the cancellation of the registration of the suppliers of the petitioner and such information was already made available to the petitioner in the show-cause notice in FORM GST DRC-01A. However, the petitioner has not produced along with the reply, any document, showing that the movement of the goods purchased or the suppliers were genuine and existent as the petitioner was in direct touch and contact with such suppliers of the goods as it has entered into various transactions. However, the petitioner has not produced along with the reply, any document, showing that the movement of the goods purchased or the suppliers were genuine and existent as the petitioner was in direct touch and contact with such suppliers of the goods as it has entered into various transactions. However, the petitioner instead of discharging the burden to prove the genuineness of the transactions of purchase of goods, has relied upon the documents available with the petitioner and instead of producing the third party evidence in form of any document from suppliers to prove his case, the petitioner has also not filed any affidavit of any supplier that the supplier was existent or the supplier has made the payment of the tax collected from the petitioner. 8. We are conscious of the fact that after the GST Act has come into effect, the modus operandi of issuing bogus invoicing is being implemented by the suppliers and the actual users without any movement of the goods and input tax credit is availed without payment of tax on the supplies. In such scenario it is, therefore, necessary that the purchasers of the goods are deprived of the Input Tax Credit when it is found that the supplier has failed to make the payment of the tax collected from the purchaser is not deposited by the supplier and only invoices are generated without actual movement of the goods. 9. We, are therefore, of the opinion that challenge to vires of Section 16 (2)(c) of the GST Act is not required to be entertained in such scenario when it is found that the suppliers of the goods to the petitioner have found to be non-existent or have indulged in bogus billing. In such circumstances, we do not entertain this petition and is accordingly dismissed. 10. It is also pertinent to note that though the learned advocate for the petitioner has raised the contention before us with regard to not giving the opportunity of cross- examination, however, no such contention is raised either in the reply to the show cause notice or in the memo of the petition. 10. It is also pertinent to note that though the learned advocate for the petitioner has raised the contention before us with regard to not giving the opportunity of cross- examination, however, no such contention is raised either in the reply to the show cause notice or in the memo of the petition. We therefore, refrain from dealing with such contention more particularly in light of the facts that this is a case of bogus invoicing by non existent suppliers for passing bogus input tax credit without supply of goods by generating all relevant documents on papers to show a fake transaction as genuine transaction. Decisions relied upon by the learned advocate of the petitioner are of no avail in the facts of the case. 11. In view of the foregoing reasons, the petition therefore being devoid of any merit is accordingly summarily rejected with no order as to cost.