Tvl. Fathima Traders v. Deputy Commercial Tax Officer, Chennai
In favour of the assessee; matter remanded
The ruling in brief
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.
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.29 — Cancellation or suspension of GST registration.
- CGST Rules R.36 — Rule 36 of the Central Goods and Services Tax Rules, 2017.
Source documents
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