Input Tax Credit case laws

Jain Cement Udyog v. Union of India

In favour of the revenue

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.

Sumant Kumar Agarwal v. Commissioner of CGST & CX

In favour of the assessee

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.

Esnp Property Builder and Developers (P.) Ltd. v. State Tax Officer (ST)

In favour of the assessee

ESNP Property Builder and Developers (P.) Ltd. filed writ petitions before the Madras High Court, decided 28 August 2026, contesting denial of input tax credit on inputs used to construct property intended for lease or license. The revenue invoked blocked credit for immovable property under section 17. The Court noted Chief Commissioner v. Safari Retreats on construction for own business use and held orders ignored that principle under sections 54 and 79 and Rule 142B. Impugned orders were set aside for fresh evaluation applying Safari Retreats to lease-intent facts. Outcome favoured the assessee. Relevant for builders structuring commercial premises and ITC claims. Not legal advice. Readers should consult the full judgment and current notifications before advising clients on compliance steps.

Cart Infralog Ltd. v. Additional Commissioner

In favour of the assessee; matter remanded

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.

Metal Trade Incorporation v. State Tax Officer

In favour of the assessee

Metal Trade Incorporation filed WP No. 35866 of 2023 before the Madras High Court, decided 21 August 2026, challenging prolonged blocking of its electronic credit ledger under Rule 86A of the CGST Rules. Restrictions continued for more than two years despite the rule prescribing a maximum one-year limitation period, after which blocked credit must be unblocked automatically. Internal departmental communications were held incapable of lawfully extending the restriction beyond the statutory period. Justice S. Raveekumar declared the continued blockage invalid and granted relief restoring normal ledger operations essential for return filing and working capital management. Outcome favoured the assessee. Chartered accountants should monitor Rule 86A timelines closely and contest overlong administrative freezes through timely writ or representation. Not legal advice.

NCC Ltd. v. Union Territory of J & K

In favour of the assessee

NCC Ltd., engaged in construction, filed WP(C) No. 1935 of 2026 before the High Court of Jammu & Kashmir and Ladakh, decided on 12 August 2026. The Additional Commissioner had blocked the company’s electronic credit ledger under CGST Rule 86A, linked to Section 49, without stating reasons or offering a prior hearing. The revenue argued Rule 86A does not mandate a show-cause. The court disagreed: blocking input tax credit affects substantive rights and carries serious civil consequences, so principles of natural justice and audi alteram partem apply even when the rule is silent on procedure. The order was held arbitrary and set aside. Outcome: in favour of the assessee. For chartered accountants reviewing ITC blocks, the decision underscores that administrative power under Rule 86A must be exercised fairly and transparently. This summary is for professional awareness and is not legal advice.

Shakti Enterprises v. Principal Commissioner of Central Tax

In favour of the assessee

Shakti Enterprises filed Writ Petition No. 1913 of 2026 (T-RES) before the Karnataka High Court; judgment 10 August 2026. On transition to GST the petitioner carried forward valid CENVAT credit into its electronic credit ledger under Section 140 and later debited that ledger to satisfy the pre-deposit required to pursue an appeal under Section 107. The Appellate Tribunal rejected the appeal, treating the pre-deposit as invalid because it was not paid in cash, relying on CBIC administrative instructions. The High Court held the statute does not restrict pre-deposit to cash when credit in the Section 49 ledger is lawfully available; circulars cannot override statutory credit rights or Rule 142 procedures. The Tribunal’s ground of rejection was quashed. Outcome: in favour of the assessee. Not legal advice.

Rajib Agarwala v. Union of India

In favour of the assessee

Rajib Agarwala approached the Gauhati High Court in WP(C) No. 2722 of 2024; judgment dated 7 August 2026. He had filed his GST return for financial year 2018–19 on 23 October 2019 and availed input tax credit on purchases reflected therein. The tax authority later denied the credit, treating the return as belated under the pre-amendment reading of Section 16(4). The issue was whether ITC remained available after retrospective insertion of Section 16(5), which allowed credit where returns for a period were filed on or before 30 November 2021. The court held the petitioner’s filing fell within that extended window, so denial was unsustainable. The impugned order was set aside; outcome in favour of the assessee. Sections 16 and 39 framed the dispute. This editorial summary is not legal advice.

H.R. Constructions v. Superintendent of Central Tax

In favour of the assessee

H.R. Constructions filed Writ Petition No. 12234 of 2021 before the Andhra Pradesh High Court, decided 6 August 2026, against reversal of input tax credit for financial year 2018-19. Credit was availed in GSTR-3B filed on 20 December 2019 but initially rejected for exceeding the 20 October 2019 deadline under section 16(4) of the CGST Act. Retrospective section 16(5), read with sections 39 and 20 of the IGST Act, extended the permissible availment window to 30 November 2021. The Division Bench held the dealer's claim timely after amendment and set aside the reversal order. Outcome favoured the assessee. Important for legacy FY 2018-19 ITC disputes following Finance Act changes. Chartered accountants should verify GSTR-3B dates against amended limits. Not legal advice.

Vasanta Resorts and Spa (P.) Ltd. v. Union of India

In favour of the assessee; matter remanded

Vasanta Resorts and Spa (P.) Ltd. filed CWP No. 12966 of 2026 before the Himachal Pradesh High Court; order 31 July 2026. The dispute concerned input tax credit blocked or denied following retrospective amendment to Section 17(5)(d), which restricts credit on construction of immovable property. The assessee filed a belated appeal; the Appellate Authority dismissed it as time-barred and declined condonation beyond the statutory limit in Section 107. The High Court set aside the dismissal on delay grounds alone and remanded the appeal for adjudication on merits of the Section 17(5)(d) challenge. Outcome: in favour of the assessee with remand. CAs should separate limitation issues from substantive ITC blocking under Section 17. Not legal advice. Merits will now include whether hospitality construction qualifies for any exception under the amended Section 17(5)(d) language.

Shiv Shakti Trading Co. v. State of Haryana

In favour of the assessee

Shiv Shakti Trading Co. and allied petitioners filed consolidated writs before the Punjab & Haryana High Court, decided 22 July 2026. The revenue had initiated proceedings under Sections 73 and 74 of the CGST, PGST and HGST Acts to recover amounts said to represent input tax or credit wrongly availed under the erstwhile Haryana VAT Act before GST. The petitioners contended that pre-GST VAT credits and related disputes fall outside the GST determination and recovery provisions. The court agreed: Sections 73 and 74 address GST-era liabilities, not legacy VAT credits governed by transition rules including Section 140. Proceedings lacked jurisdiction and could not be sustained. Outcome across the batch of petitions: in favour of the assessees. This editorial summary is not legal advice.

Advance Engineering Farms and Equipments v. State of Assam

In favour of the assessee

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.

Zach Rubber (P.) Ltd. v. State Tax Officer

In favour of the assessee

Zach Rubber (P.) Ltd. filed WP(C) No. 20131 of 2026 before the Kerala High Court; judgment 14 July 2026. The State Tax Officer denied input tax credit after the company filed its March 2020 return on 17 November 2020, treating the claim as barred under Section 16(4). The assessee relied on Section 16(5), which permits ITC where the return for the period is filed on or before 30 November 2021, and on Section 168A where relevant for timeline computation. The court held rejection as purely time-barred was unsustainable and directed reconsideration if the assessee was otherwise eligible. Outcome: in favour of the assessee. This aligns with other High Courts on post-amendment ITC relief. Not legal advice. Officers must apply Section 16(5) prospectively to March 2020 and similar periods when returns precede the November 2021 cutoff.

Venus Infra Projects v. Assistant Commissioner of ST

In favour of the revenue

Venus Infra Projects filed W.P. No. 21371 of 2026 before the Madras High Court; decision 9 July 2026. The petitioner’s GST registration was cancelled and later revived; it then sought input tax credit while filing pending returns, invoking Section 16(6). The Assistant Commissioner denied credit. The court interpreted Section 16(6) as conditional: revival allows credit only if Section 16(4) did not already bar it on the date of cancellation. Here the assessee was time-barred under Section 16(4) when registration was cancelled, so subsequent revival could not revive lost ITC. Writ dismissed; outcome in favour of revenue. Sections 16, 29, 30 and 39 together govern cancellation and credit. Summary for registration-compliance planning; not legal advice. The decision warns infra contractors that delayed returns before cancellation can permanently foreclose ITC even after registration revival.

Bhardwaj Construction v. Union of India

See the decision

M/s. Bhardwaj Construction filed CWJC No. 4763 of 2026 before the Patna High Court, decided 6 July 2026, against a section 73 BGST order disallowing input tax credit as beyond section 16(4) time limits, with recovery enforced years later. The assessee invoked retrospective sections 16(5) and 16(6) via Finance (2) Act 2024 and Circular No. 237/31/2024-GST paragraph 3.5, permitting rectification where no appeal was filed against the demand order. The Court declined writ quashing but granted liberty to file section 148 rectification within one month, with hearing and reasoned order within three months. Writ disposed accordingly. Appropriate route for time-bar ITC disputes post-circular. Not legal advice. Readers should consult the full judgment and current notifications before advising clients on compliance steps.

Silver Castle Holidays and Resorts (India) (P.) Ltd. v. Superintendent, Central Tax and Central Excise Department

In favour of the assessee

Silver Castle Holidays and Resorts (India) (P.) Ltd. filed WP(C) No. 41806 of 2025 before the Kerala High Court; decision 2 July 2026. The Superintendent, Central Tax denied input tax credit for April 2018 through March 2019, citing belated filing of returns under Section 16(4). The company showed that returns for the relevant months were in fact filed within the relaxation period prescribed by Section 16(5). Where the extended deadline applies, denial based only on the original Section 16(4) bar is inconsistent with the amended law. The court set aside the denial and held the assessee entitled to ITC if otherwise eligible on merits. Outcome: in favour of the assessee. Section 16 was the focal provision. Summary for CAs tracking post-amendment ITC timelines; not legal advice.

Santu Das v. Assistant Commissioner of CGST & C. EX, Chandannagore Division

In favour of the assessee

Santu Das filed proceedings before the Calcutta High Court (decision 1 July 2026) against the Assistant Commissioner, CGST & Central Excise, Chandannagore Division. Input tax credit for 2018–19 was denied on the sole ground that returns were filed after the original deadline in Section 16(4). Parliament later amended the CGST Act to insert Section 16(5), retrospectively relaxing the time limit so that ITC could be taken where returns were filed by 30 November 2021. The petitioner’s returns met that extended cut-off. The court held the department could not ignore the amendment and reject credit purely for delay. The impugned order was set aside; outcome in favour of the assessee. Sections 16, 73 and Rule 142 were engaged. This summary is for professional reference only and is not legal advice.

A2Z Infra Engineering Ltd. v. Union of India

In favour of the assessee; matter remanded

A2Z Infra Engineering Ltd. challenged overlapping demands for the same tax period before the Calcutta High Court in WPA No. 22309 of 2024, decided 25 June 2026. The assessee had filed GSTR-3B by 30 November 2021. Retrospective insertion of section 16(5) through Finance legislation extended and regularized input tax credit availment timelines for specified cases from 1 July 2017. The Court held a subsequent section 73 demand was unsustainable given that benefit and quashed the later order, remanding the original order-in-original for re-adjudication with verified return dates under sections 16 and 73. Outcome favoured the assessee with remand. Chartered accountants should map client facts to post-2024 section 16 amendments. Not legal advice. Readers should consult the full judgment and current notifications before advising clients on compliance steps.

24 HRS Productions v. Superintendent of GST and Central Excise

M/s. 24 HRS Productions filed W.P. No. 11123 of 2026 before the Madras High Court; the court disposed of the matter on 24 March 2026 (case metadata records 22 June 2026). The assessee challenged an ex parte order dated 29 April 2024 under section 73 following Show Cause Notice No. 62/2023 after failing to file a reply or attend personal hearing. Statutory appeal limitation had long expired. By consent, the Court remanded for de novo adjudication on merits if the assessee pre-deposits fifty per cent of disputed tax within thirty days, files a substantive reply treating the impugned order as addendum to the SCN, and meets other conditions; bank attachment would vacate on compliance. Section 16 ITC eligibility may be re-examined on merits. Not legal advice.

Tvl. Fathima Traders v. Deputy Commercial Tax Officer, Chennai

In favour of the assessee; matter remanded

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.