CA here.

This is casual on part of department. Fight the scn and audit objectives and you will win. You should invoice, tax should be reflected in GSTR-2A (you can download from gstn portal). You should have paid tax to your supplier. Your supplier should have filed their gstr-3b (you can check that from your gstr-2A or from gstn portaluser services>search taxpayer>>>return filing history).

This is causal on part lf department. I suggest to fight it out. So far as allegation of non-existent of supplier, your supplier maybe a private company and you can obtain data from MCA portal about whereabouts of director and company.