Input tax credit condition challenge barred after prior rejection, while limited time was extended to place circular-based claims before authority.

The Kerala HC noted that the challenge to Section 16(2)(c) of the CGST/SGST regime, which requires the recipient to ensure the supplier has paid output tax, had already been rejected by the Single Judge and affirmed by the Division Bench, so it could not be reopened in the writ appeal. The Court, however, allowed limited procedural relief by extending time by one month and permitting the appellant to place before the assessing authority a claim based on the cited circulars and the alleged errors in Form GSTR-3B, with directions for expeditious consideration.

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Issues: (i) Whether the challenge to Section 16(2)(c) of the CGST/SGST regime, requiring the recipient to ensure that the supplier has paid output tax, could succeed; (ii) whether the appellant should be granted additional time and liberty to place before the assessing authority the claim under the circulars and the errors said to have occurred in Form GSTR-3B.

Issue (i): Whether the challenge to Section 16(2)(c) of the CGST/SGST regime, requiring the recipient to ensure that the supplier has paid output tax, could succeed.

Analysis: The principal challenge raised in the writ petition had already been rejected by the Single Judge, and that view had been affirmed by a Division Bench. In that circumstance, the challenge to the statutory provision could not be reopened in the writ appeal.

Conclusion: The challenge to Section 16(2)(c) failed and was rejected.

Issue (ii): Whether the appellant should be granted additional time and liberty to place before the assessing authority the claim under the circulars and the errors said to have occurred in Form GSTR-3B.

Analysis: The appellant was permitted to rely on the benefit of the cited circulars before the authority below, and the Court accepted the request to permit an additional representation regarding the mistakes alleged in Form GSTR-3B. The time originally granted was extended by one month, and the authority was directed to consider the request and proceed expeditiously.

Conclusion: Additional time was granted and the appellant was permitted to raise the circular-based claim and the GSTR-3B error issue before the assessing authority.

Final Conclusion: The substantive constitutional or statutory challenge to the input tax credit condition was unsuccessful, but limited procedural relief was granted to enable the appellant to pursue the additional claim before the tax authority.

Ratio Decidendi: A statutory challenge already rejected on merits and affirmed in appeal cannot be reopened in a later writ appeal, but ancillary relief may still be granted to enable consideration of a permitted claim before the competent authority.

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