Answer

1. F

   Facts

   The department can deny ITC under Sec 16(2)(c) if the supplier did not pay the tax, but the burden under Sec 155 is on you to prove the purchase was real. Invoices alone are often not enough; transport, receipt and payment proof make the defence strong.

2. P

   Provisions and law

   • Sec 16(2)(c), CGST Act 2017ITC is allowed only if the tax charged has actually been paid to the Government by the supplier.
   • Sec 155, CGST Act 2017The person who claims ITC has the burden of proving that the claim is genuine.
   • Sec 74A, CGST Act 2017For FY 2024-25 onwards, one procedure for demands: notice within 42 months of the annual return due date, order within 12 months of the notice; penalty depends on whether fraud is alleged.
3. A

   Analysis

   Build an invoice-wise table for the named supplier with e-way bill numbers, vehicle numbers, freight bills, gate entry, stock register and bank payment. Show the supplier was registered and active on each invoice date. Argue that you are a bona fide buyer who paid tax to the supplier through banking channels. Ask for the material relied on and cross-examination of anyone whose statement is used against you.

4. C

   Conclusion

   1. 1Download the notice and note section, period, amount and reply date.
   2. 2Prepare an evidence table for every invoice named.
   3. 3Collect supplier status screenshots for each invoice date.
   4. 4Ask in writing for the material relied on and cross-examination.
   5. 5File the DRC-06 reply with all evidence and request a personal hearing.

Do not reply only with copies of tax invoices; courts have said that alone does not prove a genuine purchase.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.