Akal Trade Links v. Assistant Commissioner (ST)
In favour of the assessee; matter remanded
The ruling in brief
Akal Trade Links filed WP No. 20601 of 2023 before the Madras High Court, decided 5 June 2026, against denial of input tax credit on purchases from a registered supplier who filed returns and paid tax. Invoices listed vehicle numbers, but the department denied credit for lack of lorry receipts and weighment slips without examining supply genuineness under section 16, section 155, and Rule 36. The Court set aside the confirmation order and remanded for holistic reconsideration, allowing the assessee to prove movement and receipt. Outcome favoured the assessee with remand. Shows limits of mechanical denial based on transport documentation alone. This summary is not legal advice. Readers should consult the full judgment and current notifications before advising clients on compliance steps.
For information only — not legal advice. Read the full judgment and applicable law before relying on this summary.
Provisions considered
- CGST S.16 — Eligibility and conditions for taking input tax credit.
- CGST S.155 — Section 155 of the Central Goods and Services Tax Act, 2017.
- CGST Rules R.36 — Rule 36 of the Central Goods and Services Tax Rules, 2017.
Source documents
Similar rulings
In favour of the assessee
Advance Engineering Farms and Equipments v. State of Assam
Advance Engineering Farms and Equipments challenged input tax credit denial before the Gauhati High Court, decided 16 July 2026. The assessee paid GST to registered sellers and held valid tax invoices, yet credit was denied because sellers failed to file returns or deposit tax. Justice Devashis Baruah held denial unlawful under section 16 read with section 39 and Rules 36 and 37A. Remedy for supplier default targets the supplier, not a bona fide purchaser without collusion. Rectification demand treating availed credit as excess was set aside. Decision aligns with purchaser-protection trends in supplier-default litigation. Outcome favoured the assessee. This editorial summary is intended for CAs and is not legal advice. Readers should consult the full judgment and current notifications before advising clients on compliance steps.
In favour of the assessee; matter remanded
Tvl. Fathima Traders v. Deputy Commercial Tax Officer, Chennai
Tvl. Fathima Traders filed WP Nos. 22419, 22420 and 22422 of 2023 before the Madras High Court; ruling 12 June 2026. Input tax credit was denied because a supplier’s GST registration was cancelled with retrospective effect, even though the supplier was active and registered when most supplies occurred and transactions largely predated the cancellation order. The court held that retrospective cancellation alone, without examining whether supplies were genuine and supported under Rule 36, cannot justify wholesale ITC rejection. The matter was remanded to the assessing authority for reconsideration after granting the petitioner a reasonable opportunity of hearing. Outcome: in favour of the assessee with remand. Sections 16 and 29 were engaged. Summary for supply-chain due diligence; not legal advice. The remand ensures verification of invoices, tax payments and business nexus rather than a mechanical denial tied only to supplier registration status.
In favour of the assessee; matter remanded
Meenakshi Collections v. Assistant Commissioner (ST)
Meenakshi Collections challenged input tax credit denial before the Madras High Court in W.P. No. 24897 of 2024, decided 8 June 2026. Supplier invoices were not reflected in GSTR-2A because of technical glitches on the GST portal, which departmental communications acknowledged. The assessee otherwise satisfied conditions under section 16, section 41, and Rule 36, and relied on Circular 183/15/2022-GST. Justice C. Saravanan held denial unjustified and ruled interest and penalty under sections 50 and 74 were not payable once entitlement was established. The confirming order was set aside and the matter remanded to allow credit in accordance with law. Outcome favoured the assessee with remand. Useful when 2A mismatches arise from system errors rather than assessee misconduct. Not legal advice.
In favour of the revenue
Jain Cement Udyog v. Union of India
Jain Cement Udyog filed W.P.(C) No. 13622 of 2026 before the Delhi High Court, decided 17 September 2026, concerning input tax credit denied where supplier registrations were cancelled before invoice dates and suppliers had not paid tax. The assessee also challenged constitutional validity of section 16(2)(c) of the CGST Act under Articles 14 and 19(1)(g), relying on Rule 37A verification norms. The Court noted the Supreme Court upheld section 16(2)(c), requiring recipients to establish supplier tax deposit, and rejected the constitutional challenge. On maintainability, writ jurisdiction was declined and the assessee was relegated to statutory appeal to contest fact-specific eligibility. Outcome favoured the revenue on validity and procedure. Chartered accountants should strengthen pre-availment supplier due diligence and maintain contemporaneous audit trails for invoices. Not legal advice.
In favour of the assessee
Sumant Kumar Agarwal v. Commissioner of CGST & CX
Sumant Kumar Agarwal filed before the Calcutta High Court; order dated 10 September 2026. Revenue had reversed input tax credit citing delayed GST return filing. After retrospective insertion of Sections 16(5) and 16(6) from 1 July 2017, the assessee filed a rectification application and returns within the extended period contemplated by the amendment. There was no substantive dispute that filing met the relaxed timeline. Lower appellate authorities nevertheless rejected relief, ignoring both the retrospective extension and the pending rectification. The High Court termed that approach perverse and set aside the orders, directing appropriate relief in line with Section 16. Outcome: in favour of the assessee. Section 74 featured in the underlying demand context. This self-contained summary is not legal advice.