2026-VIL-1099-DEL
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SGST High Court Cases

GST - Challenge to validity of Section 16(2)(c) of the CGST Act, 2017 to the extent it denies Input Tax Credit to a bona fide recipient on account of non-payment of tax by the supplier - Whether Section 16(2)(c) of the CGST Act, 2017 is constitutionally valid - HELD - The issue is no longer res integra. The provision has specifically been upheld by the Supreme Court, which rejected the argument that the provision must be read down merely because the supplier may default. The condition is neither arbitrary nor disproportionate. It merely requires the recipient to establish, through cogent material, that the tax charged has been actually deposited by the supplier - The challenge to the constitutional validity of Section 16(2)(c) does not survive - Whether a writ petition challenging a SCN and Order-in-Original under Section 73 of the CGST Act, 2017 ought to be entertained where grounds urged include denial of natural justice, the bar under Section 6(2)(b) of the Act, and duplication of proceedings with an earlier DGGI investigation - HELD - The mere availability of an alternative remedy does not oust the writ jurisdiction, particularly where there is a breach of natural justice or a want of jurisdiction. This exception is to be invoked sparingly and not where the grievance is factual in nature and capable of being cured by the Appellate Authority - Whether the petitioner discharged the burden of proving actual receipt of goods and actual payment of tax by suppliers is a matter requiring appreciation of material such as transport records, delivery challans and payment trails. This exercise is more appropriately undertaken by the Appellate Authority - The record indicates that a hearing was afforded and the petitioner's reply was considered though not accepted. Whether such consideration was adequate is essentially a question of fact requiring scrutiny of the reply, hearing notings and reasoning recorded. Even if any infirmity in the hearing is made out, such infirmity is curable and does not go to the root of jurisdiction - Whether the subject matter of the earlier DGGI proceedings under Section 122 and the impugned proceedings under Section 73 is, in substance, identical so as to attract the bar under Section 6(2)(b) is a mixed question of fact and law more appropriately examined by the Appellate Authority - The plea of parallel or duplicated proceedings is similarly a matter requiring factual verification not appropriate for a writ court where an efficacious alternative remedy is available - The petitioner is relegated to the alternative remedy of appeal – The petition is disposed of
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GST & Customs updates: Sep'26
By CA Vivek Jalan

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