Answer

1. F

   Facts

   Such notices rely on Sec 16(2)(c), that tax was not actually paid, and often on Sec 74 or 74A. A genuine buyer defends with proof that goods or services were received, payment was made through bank, and the supplier was registered and filing when the invoices were issued.

2. P

   Provisions and law

   • Sec 16(2)(c), CGST Act 2017ITC only if the tax charged has actually been paid to the government by the supplier
   • Sec 16(2), CGST Act 2017ITC needs a tax invoice, receipt of goods or services, tax paid by the supplier and a filed return
   • Sec 74, CGST Act 2017Demand where fraud, wilful misstatement or suppression is alleged, for periods up to FY 2023-24
3. A

   Analysis

   Build a file per invoice: purchase order, e-way bill, transport receipt, goods inward entry, stock record and bank payment. Add the supplier's GSTIN status and GSTR-2B entries at the time. This is the defence of a genuine buyer; knowingly taking invoices without goods is an offence under Sec 122 and Sec 132 and is not defended this way.

4. C

   Conclusion

   1. 1Collect proof of receipt and payment for each invoice
   2. 2Download the supplier's status and filing history
   3. 3Show due diligence done before buying
   4. 4File DRC-06 with the evidence and request a hearing

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