Reversal of input tax credit in proportion to exempt supply: specificity of show-cause notice required; order set aside, fresh proceedings allowed wit...
Benami transaction and beneficial ownership: documentary and circumstantial evidence show payors were true beneficiaries, resulting in PBPTA consequen...
Section 16(2)(c) of the CGST/KGST Act and Rule 36(4) of the CGST/KGST Rules were read down, not struck down, so that input tax credit is not denied to a bona fide recipient who has satisfied the other statutory conditions merely because the supplier failed to remit tax to the Government. The High Court accepted that a purchaser cannot be required to ensure the supplier's tax payment, as that would impose an impossible burden and penalise the recipient for another's default. The provisions were therefore confined to non-bona fide, collusive or fraudulent transactions, and ITC remains available to genuine recipients affected only by supplier default.
Section 16(2)(c) of the CGST/KGST Act and Rule 36(4) of the CGST/KGST Rules were read down, not struck down, so that input tax credit is not denied to a bona fide recipient who has satisfied the other statutory conditions merely because the supplier failed to remit tax to the Government. The High Court accepted that a purchaser cannot be required to ensure the supplier's tax payment, as that would impose an impossible burden and penalise the recipient for another's default. The provisions were therefore confined to non-bona fide, collusive or fraudulent transactions, and ITC remains available to genuine recipients affected only by supplier default.
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