Meenakshi Collections v. Assistant Commissioner (ST)
In favour of the assessee; matter remanded
The ruling in brief
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.
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.41 — Section 41 of the Central Goods and Services Tax Act, 2017.
- CGST S.50 — Interest on delayed payment of tax.
- CGST S.74 — Determination of tax not paid or short paid involving fraud or suppression.
- CGST Rules R.36 — Rule 36 of the Central Goods and Services Tax Rules, 2017.
Source documents
Similar rulings
In favour of the assessee
Narayan Enterprise v. Union of India
Narayan Enterprise, trading in scrap batteries, challenged input tax credit denial before the Gauhati High Court in WP(C) No. 2933 of 2026, decided 4 June 2026. The assessee purchased from registered suppliers, paid GST through banking channels, filed timely returns, and availed credit supported by invoices. Denial rested entirely on suppliers' failure to deposit tax, without proof of collusion or fraudulent procurement by Narayan Enterprise under sections 16, 50, 74, and 122 read with section 20 of the IGST Act. The Court set aside impugned orders and preserved the department's liberty to proceed against suppliers directly. Outcome favoured the assessee. Mirrors related scrap-trade decisions from the same bench emphasising documentary and banking compliance by purchasers. Intended for professional awareness; not legal advice.
In favour of the assessee
Gurucharan Kangsa Banik v. Union of India
Gurucharan Kangsa Banik, trading in scrap batteries, challenged denial of input tax credit before the Gauhati High Court, decided 3 June 2026. He purchased from registered suppliers, paid price plus GST through banking channels, maintained proper invoices, and filed returns reflecting availed credit. The revenue denied credit solely because suppliers did not remit tax to the exchequer, without alleging collusion or sham transactions by the purchaser. Justice Kardak Ete held that under section 16 of the CGST Act the remedy for supplier default lies against the supplier; consequential interest and penalty under sections 50, 74, and 122 could not stand. Impugned demand and penalty orders were set aside. Outcome favoured the assessee. Consistent Gauhati jurisprudence on supplier non-payment. 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.
In favour of the assessee; matter remanded
Cart Infralog Ltd. v. Additional Commissioner
Cart Infralog Ltd. challenged input tax credit recovery before the Calcutta High Court in WPA No. 16556 of 2025, decided 27 August 2026. The assessee demonstrated valid tax invoices, physical receipt of goods, and payment to suppliers for the transactions in dispute. Recovery was nevertheless pursued because suppliers failed to deposit GST and corresponding entries did not appear in GSTR-2A. Justice Smita Das De held that, absent collusion or fraud by the recipient, coercive recovery from the purchaser was without jurisdiction under sections 16, 73, 74, and 79 of the CGST Act; the department should first proceed against defaulting suppliers under section 79. The impugned recovery was quashed and the matter remanded for lawful action. Outcome favoured the assessee. This editorial summary is for chartered accountants and is not legal advice.
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.