# M/s Sah Agencies Private Ltd. & Ors v. Cinni Foundation Trust & Ors

- **Citation:** (2025) 5 ILRA 247
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-05-21
- **Case number:** Commercial Appeal No. 8 of 2025
- **Bench:** Arun Bhansali, C.J. Kshitij Shailendra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-sah-agencies-private-ltd-ors-v-cinni-foundation-trust-ors-53350
- **Pages:** 8

## Headnote

Civil Law - Commercial Courts Act, 2015Section 12-A-Suit instituted for a decree for
permanent prohibitory injunction- restraining
the defendants from using, selling, soliciting etc.
or, in any other manner, dealing or using the
trademark 'CINNI' -and also restraining them
from disposing of or dealing with the assets and
stock in trade-decree for mandatory injunction
was also claimed directing the defendants to
deliver all the finished and unfinished materials
bearing the impugned and violative trademark
to
the
plaintiffs-
an
application
seeking
temporary injunction on the lines of permanent
prohibitory injunction was moved- an application
requesting dispensation/exemption from the
requirement of mediation- order impugned in
three parts-the first part dispenses with the
statutory
requirement
of
pre-institution
mediation - the second part granted ex- parte
interim injunction in favour of the plaintiffrespondents-third part relates to appointment of
Amin Commissioner and Advocate Commissioner
to conduct some investigation- no reasoning
was
assigned
while
dispensing
with
the
mandatory
requirements
of
pre-institution
mediation-the contents of application under
Section 12-A are contrary to the reasoning
assigned while granting temporary injunctionimpugned order set aside.

Appeal allowed. (E-9)

List of Cases cited:

## Text

5 All. M/S Sah Agencies Private Ltd. & Ors. Vs. Cinni Foundation Trust & Ors.
247
English translation of impugned
judgment, overnight.

11. The appeal is allowed to above
extent and disposed of.
----------
(2025) 5 ILRA 247
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 21.05.2025

BEFORE

THE HON'BLE ARUN BHANSALI, C.J.
THE HON'BLE KSHITIJ SHAILENDRA, J.

Commercial Appeal No. 8 of 2025

M/s Sah Agencies Private Ltd. & Ors.
 ...Appellants
Versus
Cinni Foundation Trust & Ors.
 ...Respondents

Counsel for the Appellants:
Mr. Anupam Kulshreshtha, Mr. Arpit
Agarwal

Counsel for the Respondents:
Mr. Anand Kumar Singh, Mr. Ashish Kumar
Singh

Civil Law - Commercial Courts Act, 2015Section 12-A-Suit instituted for a decree for
permanent prohibitory injunction- restraining
the defendants from using, selling, soliciting etc.
or, in any other manner, dealing or using the
trademark 'CINNI' -and also restraining them
from disposing of or dealing with the assets and
stock in trade-decree for mandatory injunction
was also claimed directing the defendants to
deliver all the finished and unfinished materials
bearing the impugned and violative trademark
to
the
plaintiffs-
an
application
seeking
temporary injunction on the lines of permanent
prohibitory injunction was moved- an application
requesting dispensation/exemption from the
requirement of mediation- order impugned in
three parts-the first part dispenses with the
statutory
requirement
of
pre-institution
mediation - the second part granted ex- parte
interim injunction in favour of the plaintiffrespondents-third part relates to appointment of
Amin Commissioner and Advocate Commissioner
to conduct some investigation- no reasoning
was
assigned
while
dispensing
with
the
mandatory
requirements
of
pre-institution
mediation-the contents of application under
Section 12-A are contrary to the reasoning
assigned while granting temporary injunctionimpugned order set aside.

Appeal allowed. (E-9)

List of Cases cited:

1. Patil Automation Pvt. Ltd. & ors. Vs Rakheja
Engineers Pvt. Ltd.: AIR 2022 Supreme Court
3848

2. Smt. Chitra Agrawal Vs Jagdish Saran Goel:
1995 (1) ARC 80;

3. Gujarat Bottling Co. Ltd. & ors.Vs Coca Cola
Co. & ors.: (1995) 5 SCC 545

4. Yamini Manohar Vs T.K.D. Keerthi: (2024) 5
SCC 815

5. Dhanbad Fuels Pvt. Ltd. Vs U.O.I. & anr.:
2025 SCC OnLine SC 1129

(Delivered by Hon'ble Kshitij Shailendra, J.)

1. Heard Shri Anupam Kulshreshtha,
learned
counsel
for
the
defendantappellants, Shri Ashish Kumar Singh,
learned counsel for plaintiff-respondents
and perused the record.

THE CHALLENGE

2. The present appeal has been filed by
the defendants of Original Suit No.10 of
2025
challenging
the
order
dated
05.04.2025 passed by the Presiding Officer,
Commercial Court, Varanasi. The order
impugned is in three parts; the first part
dispenses with the statutory requirement of
248 INDIAN LAW REPORTS ALLAHABAD SERIES
pre-institution
mediation
contemplated
under Section 12-A of the Commercial
Courts Act, 2015 (in short 'the Act'); the
second
part
grants
ex-parte
interim
injunction in favour of the plaintiffrespondents and the third part relates to
appointment of Amin Commissioner and
Advocate Commissioner to conduct some
investigation.

FACTS IN BRIEF

3. The aforesaid suit was instituted
praying for a decree for permanent
prohibitory
injunction
restraining
the
defendants,
their
assigns,
agents,
representatives,
distributors,
heirs,
successors, stockiests and others acting for
and on their behalf from using, selling,
soliciting,
exporting,
displaying,
advertising etc. or, in any other manner,
dealing or using the trademark 'CINNI'
forming similar words/marks thereto and
also restraining them from disposing of or
dealing with the assets and stock in trade. A
decree for mandatory injunction was also
claimed directing the defendants to deliver
all the finished and unfinished materials
bearing
the
impugned
and
violative
trademark including its blocks, labels,
display boards, signboards, trade literature
and goods etc. to the plaintiffs. Further
decree for accounting was also claimed.

4. Alongwith the suit, an application
seeking temporary injunction on the lines
of permanent prohibitory injunction was
moved under Order XXXIX Rules 1 and 2
readwith Section 151 of Civil Procedure
Code, 1908 (in short 'C.P.C.'). Since the
Act contemplates pre-institution mediation
and
settlement,
the
plaintiffs,
citing
urgency, also filed an application under
Section
12-A
thereof
requesting
dispensation/exemption
from
the
said
requirement.

SUBMISSIONS ADVANCED ON
BEHALF OF THE APPELLANTS

5. Learned counsel for the appellants
submits
that
dispensation
of
the
requirements under Section 12-A of the Act
was not justified in the facts of the case and
grant of ex-parte injunction is also
seriously prejudicial to the interest of the
defendants-appellants, particularly, in view
of the fact that they are running their
business pursuant to valid licenses issued in
their favour from time to time. Reliance has
been placed on Annexures 6 and 7 to the
affidavit and it is urged that license was
granted on 27.07.2011 which was effective
upto 26.07.2014, and further licenses
issued in their name indicated periods of
their validity upto 01.12.2015, 30.10.2017
and, lastly, upto 27.07.2034. Submission,
therefore, is that before passing any order
on injunction application, notice should
have been issued to the defendantsappellants and it was not a matter where
urgency stood reflected from the record.

6. Further submissions have been
made as regards various proceedings
pending and decided in relation to the same
trademark and business at New Delhi, some
before the District Judge and some before
Delhi High Court and another before Civil
Judge, Varanasi, the record pertaining
whereto has been annexed and it has been
argued that as the said proceedings and
their results having been concealed by the
plaintiffs-respondents
while
obtaining
injunction in the present proceedings,
impugned order should be set aside.
Various other submissions on merits qua
injunction matter have also been advanced
by Shri Kulshreshtha and in support of his
5 All. M/S Sah Agencies Private Ltd. & Ors. Vs. Cinni Foundation Trust & Ors.
249
submissions, reliance has been placed on
the judgment of Hon'ble Supreme Court in
Patil Automation Private Limited and
others vs. Rakheja Engineers Private
Limited: AIR 2022 Supreme Court 3848.
Argument is that if mandate of Section 12A of the Act is violated, the same would
result in rejection of plaint and such a
power can also be exercised by the Court
suo moto.

SUBMISSIONS ADVANCED ON
BEHALF OF THE RESPONDENTS

7. Per contra, Shri Ashish Kumar
Singh submits that the appellants have
already filed an application under Order
XXXIX Rule 4 C.P.C. for vacating the
interim injunction order and substantial
hearing has been done by the Commercial
Court but final order could not be passed as
some of the defendants are seeking
adjournment in the proceedings and, now,
20.05.2025 has been fixed for passing
further orders. Shri Singh further submits
that as far as proceedings pending or
decided by the courts at Varanasi or New
Delhi including the Hon'ble High Court of
Delhi, are concerned, some of them were
not interse parties and, even otherwise, the
issues involved therein were different from
these
proceedings.
Dispute
regarding
trusteeship, change in position of trustees,
validity of licenses issued in favour of the
defendants-appellants
and
many other
issues were sought to be raised before us so
as to justify grant of injunction.

8. When confronted with the cryptic
nature of the injunction order, submission
has been made that though the order
granting injunction does not deal much
with the material on record, nevertheless,
the appellants having no case and finding
on existence of prima facie case based upon
documents
filed
alongwith
injunction
application, having been recorded in favour
of the plaintiff-respondents, the order
impugned may not be set aside only on this
ground. It is further urged that when the
appellants, claiming themselves to be
licensees, started issuing licences to other
persons qua which they had no factual or
legal authority, the suit was filed and
injunction was claimed which has rightly
been
granted.
In
support
of
his
submissions, reliance has been placed on
the following judgments:-

(a). Smt. Chitra Agrawal vs.
Jagdish Saran Goel: 1995 (1) ARC 80;

(b). Gujarat Bottling Co. Ltd.
and others vs. Coca Cola Co. and others:
(1995) 5 SCC 545.

DISCUSSION AND FINDINGS

9. Having heard learned counsel for
the parties, first of all, we deem it
appropriate to refer to relevant portion of
Section 12-A of the Act, which reads as
under:-

"12A.
Pre-Institution
Mediation and Settlement.-- (1) A suit,
which does not contemplate any urgent
interim relief under this Act, shall not be
instituted unless the plaintiff exhausts
the remedy of pre-institution mediation
in accordance with such manner and
procedure as may be prescribed by rules
made by the Central Government.

......................"

10. A bare perusal of the afore-quoted
provision indicates that no commercial suit
shall be instituted unless the plaintiff
exhausts the remedy of pre-institution
mediation as per the procedure prescribed
by rules; however, there is an inherent
250 INDIAN LAW REPORTS ALLAHABAD SERIES
exception to the said bar in the provision
itself, i.e. to say that, in case, any urgent
interim relief is contemplated in the suit,
the plaintiff would not be obliged to
exhaust the remedy of pre-institution
mediation.

11. Since the order granting exemption
from the requirements of pre-institution
mediation is under challenge before us, we
deem it appropriate to first deal with this
aspect of the matter.

12. The record reflects that the suit in
question,
alongwith
application
under
section 12-A, was instituted on 05.04.2025.
In 3rd, 4th, 5th and 6th paragraphs of the
application under Section 12-A, following
assertions were made:-

"3- That the Plaintiffs have
discovered on 27-03-2025 that infringing
goods worth several crores have already
been manufactured and are in the
process of being sold, distributed or
passed
off
in
the
market.
Such
unauthorized and deceptive use is not
only causing huge monetary loss but is
also
damaging
the
goodwill
and
reputation associated with the Plaintiffs'
Trade mark/ Trade Name CINNI.

4- That there is an urgent and
immediate need to prevent the further
circulation and sale of these counterfeit
goods to avoid irreparable loss and injury
to the Plaintiffs. Any delay in the grant of
relief may result in the dissipation of
infringing stock and render the plaintiffs
remediless.

5. That as per the proviso to
Section 12A(1) of the Commercial Courts
Act, 2015, the requirement of preinstitution mediation does not apply where
the suit contemplates urgent interim relief.
The present case clearly qualifies for such
exemption,
as
the
Plaintiffs
are
simultaneously filing applications for ad
Interim injunction, appointment of court
Amin, and Advocate Commissioner to
seize and seal the infringing goods.

6 That in view of the above, the
Plaintiffs most respectfully seek exemption
from the mandatory requirement of prelitigation mediation in terms of Section
12A of the Commercial Courts Act, 2015."

13. From the aforesaid contents of the
application under Section 12-A of the Act,
it is reflected that the plaintiffs had stated
discovery of alleged illegal acts of the
defendants only on 27.03.2025, i.e. about
one week prior to institution of the suit.
The Commercial Court, while allowing the
application under Section 12-A, did not
refer even a single averment of the said
application and the same was cryptically
allowed on 05.04.2025 itself, in the
following words:-

" मामले के िथ्यों व पररतथितियों में प्रािथना-पत्र
थवीकार तकये र्जाने का आिार पयाथप्त है। अिः प्रािथना-पत्र 8 ग
अन्द्िगथि िारा 12A वातणतययक न्द्यायालय अतितनयम 2015
सपतिि िारा 151 तसतवल प्रतिया सांतहिा थवीकार तकया र्जािा है।
वादी को अन्द्िगथि िारा 12A वातणतययक न्द्यायालय अतितनयम
2015 के अनुपालन से उनमुक्त तकया र्जािा है ििा वाद अग्रसाररि
करने की अनुमति प्रदान की र्जािी है। पत्रािली लन्च बाद पेश
िो।"

14. The law regarding requirement of
pre-litigation mediation under Section 12-A
of the Act in commercial suits which
'contemplate any urgent interim relief' has
been laid down by Hon'ble Supreme Court
in Yamini Manohar Vs. T.K.D. Keerthi:
(2024) 5 SCC 815, wherein it has been laid
down as under:-

"10. We are of the opinion that
when a plaint is filed under the CC Act,
5 All. M/S Sah Agencies Private Ltd. & Ors. Vs. Cinni Foundation Trust & Ors.
251
with a prayer for an urgent interim relief, the
commercial court should examine the nature
and the subject-matter of the suit, the cause of
action, and the prayer for interim relief. The
prayer for urgent interim relief should not be a
disguise or mask to wriggle out of and get over
Section 12-A of the CC Act. The facts and
circumstances of the case have to be
considered holistically from the standpoint of
the plaintiff. Non-grant of interim relief at the
ad interim stage, when the plaint is taken up
for registration/admission and examination,
will not justify dismissal of the commercial
suit under Order 7 Rule 11 of the Code; at
times, interim relief is granted after issuance of
notice. Nor can the suit be dismissed under
Order 7 Rule 11 of the Code, because the
interim relief, post the arguments, is denied on
merits and on examination of the three
principles, namely: (i) prima facie case, (ii)
irreparable harm and injury, and (iii) balance
of convenience. The fact that the court issued
notice and/or granted interim stay may
indicate that the court is inclined to entertain
the plaint.

11. Having stated so, it is difficult to
agree with the proposition that the plaintiff has
the absolute choice and right to paralyse
Section 12-A of the CC Act by making a
prayer for urgent interim relief. Camouflage
and guise to bypass the statutory mandate of
pre-litigation mediation should be checked
when deception and falsity is apparent or
established.
The
proposition
that
the
commercial courts do have a role, albeit a
limited one, should be accepted, otherwise it
would be up to the plaintiff alone to decide
whether to resort to the procedure under
Section 12-A of the CC Act. An "absolute and
unfettered right" approach is not justified if the
pre-institution mediation under Section 12-A
of the CC Act is mandatory, as held by this
Court in Patil Automation.

12. The words "contemplate any
urgent interim relief" in Section 12-A(1) of
the CC Act, with reference to the suit,
should be read as conferring power on the
court to be satisfied. They suggest that the
suit must "contemplate", which means the
plaint, documents and facts should show
and indicate the need for an urgent interim
relief. This is the precise and limited
exercise that the commercial courts will
undertake, the contours of which have been
explained in the earlier paragraph(s). This
will be sufficient to keep in check and
ensure that the legislative object/intent
behind the enactment of Section 12-A of
the CC Act is not defeated."

15. In terms of the above law, the
Commercial Court is required to undertake
exercise to the extent that the plaint,
documents and facts in the suit should
show and indicate the need for an urgent
interim relief which do have a role and the
plaintiff does not have an absolute and
unfettered right in this regard. The said
observations have been approved by
Hon'ble Supreme Court in Dhanbad Fuels
Private Limited Vs. Union of India and
Another: 2025 SCC OnLine SC 1129.

16. A bare look at the order passed on
application under Section 12-A of the Act
would reveal that the exercise as, required
in
terms
of
the
above
judgements,
apparently has not been undertaken by the
Commercial Court.

17. The Commercial Court, after
granting exemption under Section 12-A,
directed the matter to be posted after lunch
same
day
and
when
the
injunction
application was taken up after lunch,
following inter alia is the reason recorded
for grant of injunction:-

"वादीगण के िरि से र्जो अतभलेख दातखल तकये
गये हैं उससे थपष्ट होिा है तक वादीगण flUuh िाउन्द्डेशन ट्रथट के
252 INDIAN LAW REPORTS ALLAHABAD SERIES
ट्रथटी हैं ििा उन्द्हे यह वाद दायर करने का अतिकार izkIr है।
वादीगण की िरि से प्रतिवादीगण को flUuh ट्रेडमाकथ के
अतिलांघन करने से रोकने हेिु कई पत्र पुतलस आयुक्त वाराणसी को
प्रेतषि तकये गये हैं साि ही साि वषथ 2021 में सुमीि अग्रवाल,
श्रीमिी मांर्जू अग्रवाल, प्रशान्द्ि अग्रवाल, दीपक कुमार साह एवां
शशी कुमार साह के तवरूद्ध कापी राइट एक्ट 1957 की िारा 63
व 65 के िहि प्रिम सूचना ररपोटथ पांर्जीकृि कराई गयी है।"

17. The afore-quoted portion of the
impugned injunction order reflects that the
Commercial Court itself had taken note of
the plaintiffs' contention as regards moving
of certain applications before the Police
Authorities as well as lodging of First
Information Report against the appellants
and others in the year 2021. A bunch of
papers forming part of the injunction
application were also placed before us by
the
learned
counsel
for
plaintiffsrespondents during the course of hearing.
The said documents include a copy of the
First Information Report dated 10.06.2021
lodged by
the
Trustee
of
plaintiffrespondent
No.1-Trust
against
the
appellants and others. The F.I.R. contains
same allegations which have been levelled
against the appellants in the present suit i.e.
regarding alleged unauthorized use of the
concerned trademark/label etc. and the
business activities being carried by the
appellants on that basis.

18. It is therefore apparent from record
as well as the order passed by the
Commercial Court that the dispute between
the parties was, admittedly, in existence, at
least, since 2021 and the same has been made
basis for grant of interim injunction. In such
fact situation, when we examine the order
granting dispensation of mandatory statutory
requirements contemplated under Section 12A, we find absolute contradiction in the
approach of Commercial Court, i.e. to say
that once the Commercial Court observed
about taking recourse to criminal action by
the plaintiffs against the defendants in the
year 2021 and took it as the basis for grant of
injunction, there appears to be no justifiable
reason as to why the Court was swayed with
the assertion made in third paragraph of the
application under Section 12-A of the Act
wherein the plaintiffs had pleaded alleged
discovery of alleged infringement of rights on
27.03.2025.

19. As far as appointment of Amit
Commissioner/Advocate
Commissioner
under the order impugned is concerned,
the said order also records strange
observations. The Commercial Court has
issued an absolutely vague direction to
the Amin Commissioner asking him to
submit
a
report
about
whatever
production and parts in relation to
'CINNI' trademark are found by him with
a further liberty granted to him to take
police aid as per need. Further, without
specifying the name of any particular
Advocate, another vague direction has
been
issued
to
an
Advocate
Commissioner to submit identical report
in relation to areas outside Varanasi.

20. Learned counsel for the respondents
has invited attention of this Court towards a
subsequent order dated 12.05.2025 wherein
the Commercial Court has observed that the
lawyer who earlier appointed as Advocate
Commissioner, was not taking interest in the
matter and, therefore, the parwana issued to
him was withdrawn/called back directing
issuance of such parwana to some other
Advocate. The order dated 12.05.2025 being
in furtherance of the initial order appointing
Amin/Advocate Commissioner is of no
significance and, therefore, the same would
not come to the aid of the respondents to
justify appointment/change of Advocate
Commissioner.
5 All. M/S Sah Agencies Private Ltd. & Ors. Vs. Cinni Foundation Trust & Ors.
253

21. The matter can also be viewed
from a different angle. It is reflected from
the impugned order that though urgency
was assumed or found by the Commercial
Court in pre-lunch session while granting
exemption and without assigning any
reason, a different reasoning contrary to the
stand taken in application under Section
12-A was assigned in post-lunch session
while granting interim injunction. Situation
could have been different, had it been a
case where disposal of the application
under Section 12-A and the one seeking
injunction had been made on different dates
based upon material on record, however,
decision on three applications on the very
day of institution of the suit and in the
manner as indicated above, reflects undue
haste on the part of the Commercial Court.

22. Once this Court is satisfied that, in
the instant case, the mandate of Section 12-A
of the Act and the law laid down by Hon'ble
Supreme Court has not been followed, the
impugned order cryptically granting interim
injunction as well as directions with regard to
appointment
of
Amin
Commissioner/
Advocate
Commissioner
automatically
become non-est.

23. The judgements cited by learned
counsel for the respondents in the cases of
Smt. Chitra Agrawal (supra) and Gujarat
Bottling Co. Ltd. (supra) are on the point
that merely because the injunction order is
cryptic or does not assign detailed reasons,
the same cannot be interfered with on this
ground alone and that the appellate court is
always empowered to examine the merits
of the case independent of the nature of the
order
passed
on
interim
injunction
application.

24. The said judgements are not
directly applicable in the present case,
inasmuch as, at this stage, we are not much
concerned
about
the
merits
of
the
temporary injunction matter, inasmuch as,
both the parties are at hot contest qua the
same. What we are concerned with is the
aspect as to whether, in the facts of the case
and even as per assertions made by the
plaintiff-respondents, it was at all a fit case
where
dispensation
of
the
statutory
requirements contained under Section 12-A
of the Act could be justified and as to when
the order allowing application under
Section
12-A
does
not
follow
the
prescribed
procedure,
whether
all
consequential orders passed on that day, or
later on, would sustain or not.

CONCLUSION:

25. Once we are satisfied that no
reasoning was assigned by the Commercial
Court while dispensing with the mandatory
requirements of pre-institution mediation,
rather the contents of application under
Section 12-A are contrary to the reasoning
assigned
while
granting
temporary
injunction, the situation leads us to only
one conclusion that the matter should go
back to the Commercial Court to the stage
of considering dispensation of requirements
of pre-institution mediation.

26. Since all the parties have appeared
before the Commercial Court and are hotly
contesting the matter of injunction as well
as existence/non-existence of urgency, we
deem it appropriate not to make any
observation regarding merits of the claim
for injunction, otherwise our observations
made eitherway would affect further
proceedings in the suit itself and the result
thereof.

27. Consequently, the appeal is
allowed. The order dated 05.04.2025
254 INDIAN LAW REPORTS ALLAHABAD SERIES
passed
by
the
Presiding
Officer,
Commercial Court, Varanasi in Original
Suit No.10 of 2025 is set aside in toto. The
matter is remitted back to the Commercial
Court, Varanasi to decide the application
under Section 12-A of the Act after
granting opportunity of hearing to both the
parties and deal with the matter as per its
determination.
----------
(2025) 5 ILRA 254
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.05.2025

BEFORE

THE HON'BLE ROHIT RANJAN AGARWAL, J.

Writ Tax No. 501 of 2023

Trendships Online Services Private Ltd.
 ...Petitioner
Versus
Commissioner Commercial Tax U.P. at
Lucknow & Anr. ...Respondents

Counsel for the Petitioner:
Pooja Talwar

Counsel for the Respondents:
C.S.C.

(A) Taxation Law - GST - Input Tax
Credit - U.P. Goods and Services Tax
Act, 2017 /Central Goods and Services
Tax Act,
2017
- Section 16(2)(c),
41,43A & 74 - eligibility and condition
for input tax credit (ITC) - "Tax
charged in respect of such supply has
been actually paid to Government" -
Burden of proof upon purchasing dealer
-
eligibility
to
ITC
under
Section
16(2)(c) is subject to actual deposit of
tax by supplier - Mere production of tax
invoice and payment through banking
channel not sufficient - Burden lies on
purchasing dealer to prove genuineness
of transaction and actual movement of
goods - Failure to prove deposit of tax
by supplier disentitles purchaser from
claiming ITC - Section 74 mechanism
operates to recover wrongly availed ITC
- Preventive scheme under GST to curb
bogus/fraudulent
ITC
claims
emphasised - Compliance of Section
16(2)(c) mandatory - burden on dealer
cannot shift to Revenue - ITC claim
unsustainable where supplier fails to
deposit tax and purchaser fails to prove
actual transaction and deposit of tax as
mandated under Section 16(2)(c). (Para
9, 11, 16, 19 to 21, 24, 28 to 31)

Petitioner, a registered dealer under U.P.
GST Act - claimed ITC for 2017-18 on filter
paper purchases from supplier Shree Radhey
International - Supplier's registration was
later cancelled - tax remained unpaid - Tax
authorities demanded reversal via Section 74
notice - appellate authority upheld demand.
(Para 1 to 3 ,27 to 31)

HELD: - Petitioner failed to establish that
supplier deposited tax with Government as
required
by
Section16(2)(c).
Mere
production of tax invoice and payment
through banking channel not sufficient.
Burden
of
proof
to
establish
actual
transaction, physical movement of goods,
and tax deposit lies on purchasing dealer.
Authorities
rightly
reversed
ITC
under
Section 74. No interference warranted.
Interim order discharged. (Para - 19 to 21,
28 to 31, 33 to 36)

Petition dismissed. (E-7)

List of Cases cited:

1.
M/s
Solvi
Enterprises
Vs
Additional
Commissioner Grade II & anr., Writ Tax No.
1287 of 2024

2. Suncraft Energy Pvt. Ltd. & anr. Vs The
Assistant Commissioner, St. Tax, MAT 1218 of
2023

3. Rimjhim Ispat Ltd. Vs U.O.I. & ors., Writ Tax
No. 1611 of 2022

4. Ajnara Realtech Ltd. Vs St. of U.P. & ors.,
2025 NTN (Vol. 87) 521