2024 (6) TMI 1092 - HC - GST

Seeking entitlement for Input Tax Credit - challenge to vires of the provisions of Section 16 (2) (c) of the Central Goods and Services Tax Act, 2017 - HELD THAT - Issue Rule returnable on 10.07.2024. By way of ad-interim relief, no coercive steps shall be taken by the respondent authorities during the pednency of these petitions. To be heard with Special Civil Application No. 15188 of 2020 and allied matters.

Summary

Issues involved:
Challenge to the vires of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017.

Analysis:

Issue 1: Challenge to the vires of Section 16(2)(c) of the CGST Act

The petitioners filed petitions challenging the validity of Section 16(2)(c) of the CGST Act. The provision imposes burdens on purchasers seeking entitlement for Input Tax Credit (ITC). The first burden requires the purchaser to ensure the seller is registered under the GST Act and has paid the tax on the supplied goods. The second burden necessitates the purchaser to verify that the GST for which ITC is claimed has been paid by the seller. The petitioners argued that the purchaser must demonstrate that the seller utilized the ITC for all past transactions related to the supplied goods. They contended that in case of supplier registration cancellation, demands for unpaid GST should not be levied on the purchaser.

Issue 2: Interim Relief and Future Proceedings

The court, after considering the submissions, issued a Rule returnable on a specified date. It granted ad-interim relief by directing that no coercive steps should be taken by the respondent authorities during the pendency of the petitions. The matter was scheduled to be heard along with other related cases.

This analysis provides a detailed overview of the judgment, focusing on the challenges to the statutory provision and the interim relief granted by the court.