2024 (10) TMI 1115 - HC - GST

Input Tax Credit Denied: Conditional Right Requires Proof of Tax Remittance by Supplier Under CGST Act

TIRUPATI BALAJI TRADERS Versus UNION OF INDIA, STATE OF KERALA, THE ADDITIONAL COMMISSIONER, THE DEPUTY COMMISSIONER, THE ASSISTANT COMMISSIONER, THE SUPERINTENDENT, THE SUPERINTENDENT KOCHI, THE ASSISTANT COMMISSIONER – ASSESSMENT THEVARA, MR VICHITRA NARAYAN PATHAK BHOPAL

The HC dismissed the writ petition challenging input tax credit denial. The court ruled that input tax credit is a conditional right, requiring proof that ... Denial of input tax credit - interpretation of Section 16(2)(c) of the Central Goods and Services Tax/State Goods and Services Tax Act, 2017 - HELD THAT:- Since the right to avail input tax credit is a conditional right, the petitioner cannot be given the benefit of input tax credit unless the amount of tax collected from the petitioner has actually been paid to the exchequer - the above view is taken in the light of the observations of a Division Bench of this Court in Nahasshukoor v. Assistant Commissioner and Others [2023 (11) TMI 1153 - KERALA HIGH COURT], where this Court held 'As stated already, the input tax credit is in the nature of a benefit or concession conferred under the statute. The impugned provisions prescribe certain conditions for the purchasing dealers to avail of the benefit. It is up to the purchasing dealer to avail of the said benefit/concession following those conditions.' The writ petition fails and it is accordingly dismissed. The writ petition challenging denial of input tax credit was dismissed by the Kerala High Court, citing a previous judgment in M.Trade Links v. Union of India. The Court held that input tax credit is a conditional right, and the petitioner cannot claim it unless the tax paid to the supplying dealer has been remitted to the government. The decision was based on the provisions of the CGST/SGST Act and the Insolvency and Bankruptcy Code, 2016.