Generate professional replies to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Step 1 – Issue Identification & Review
The AI analyses your query, notice, order, or uploaded documents and identifies the key issues involved.
• Review the issues identified by the AI • Add, edit, remove, or refine issues as required
Step 2 – Draft Generation
Once you approve the issues, the AI performs issue-wise legal research and prepares a structured draft response.
• Relevant statutory provisions • Judicial precedents and Supreme Court, High Court and other citations • Issue-wise legal analysis • Practical arguments and supporting content • Professionally structured draft ready for further review.
Input Tax Credit Denied Where Supplier's GST Was Cancelled: s.16(2)(c) CGST Act and Rule 36(4) Applied HC held that the petitioner was not entitled to input tax credit under s.16(2)(c) CGST Act read with Rule 36(4) because the supplier's GST registration ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Input Tax Credit Denied Where Supplier's GST Was Cancelled: s.16(2)(c) CGST Act and Rule 36(4) Applied
HC held that the petitioner was not entitled to input tax credit under s.16(2)(c) CGST Act read with Rule 36(4) because the supplier's GST registration had been cancelled prior to issuance of the relevant invoices, making it impossible for tax to have been paid to the Government. As payment of tax to the exchequer is a mandatory precondition for availing input tax credit, no direction (mandamus) could be issued to compel grant of such credit contrary to the statute and rules. Finding no merit, the writ petition was dismissed.
Issues involved: Interpretation of Section 16(2)(c) of the Central Goods and Service Tax Act, 2017 regarding entitlement to input tax credit when tax is not paid to the Government by the supplier.
The judgment by the High Court of Madras addressed the issue of whether a petitioner who paid GST to a supplier, whose GST registration was cancelled before the transaction, is entitled to input tax credit. The petitioner had purchased goods from the second respondent, paying an amount including GST, but the second respondent's GST registration had been cancelled prior to the transaction. The petitioner argued that since they had paid the tax due on the invoices to the supplier, they should not be liable to pay IGST. However, the first respondent contended that the petitioner is not entitled to relief as per Section 16(2)(c) of the CGST Act, 2017 read with Rule 36(4).
The court examined Section 16(2)(c) of the CGST Act, which states that a registered person is not entitled to credit of input tax if the tax has not been paid to the Government. Since the second respondent's registration was cancelled before the invoices were raised, it was evident that the tax could not have been paid to the Government. Therefore, the court held that the petitioner cannot claim input tax credit contrary to the provisions of the GST Act and Rules. The court dismissed the writ petition, stating that the petitioner can seek recovery from the suppliers through legal means, without imposing any costs.
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