Tripura HC renders interim relief on credit denied owing to suppliers fault of non-payment

August 23, 2021

Honorable High Court of Tripura provides interim relief in case of M/s Sahil Enterprises v UOI reported at 2021 (8) TMI 877 - Tripura High Court against denial of credit under Section 16(2)(c) of the CGST Act, 2017 arising from suppliers omission. 


Petitioner has challenged the vires of Section 16(2)(c) of Central Goods and Services Tax Act, 2017 as being violative of Articles 14, 19(1)(g) and 300A of the Constitution of India. The said provision provides that a registered dealer would be eligible for claiming input tax credit on the goods purchased on the condition that subject to the provisions of Sections 41 and 43A of the Act, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of such supply. The case of the petitioner is that having paid CGST on the purchases made from a registered dealer, the petitioner thereafter has no control over the seller to ensure that such tax is deposited with the Government revenue as is statutorily is his obligation. Denying to the petitioner input tax credit on such purchases on which the petitioner has already paid tax on the ground that the selling dealer did not deposit the tax with the Government revenue would amount to double taxation.



Since legislation framed by the Parliament is under challenge, let there be notice to the learned Attorney General.

For the limited purpose of considering the petitioner’s request for interim relief for removing attachment of the Tax Credit Account, let notice be returnable on 23.08.2021.