Five Game-Changing ITC Judgments You Should Know

Five Game-Changing ITC Judgments You Should Know

Research by: Abhishek Raja Ram, 9810638155

Don't forget to Bookmark/Save this post.

1. The Madras High Court overrules the tax authority's order denying the Input Tax Credit without hearing the petitioner's objections.

Input Tax Credit has been disallowed without considering the petitioner's objection - invocation of Section 161 of the GST Act to enable them to rectify the error apparent on the record. If opportunity not availed, impugned order revived.

Tvl. Annai Abirami Electricals vs Commissioner of Commercial Tax, Dindigul

(2024) 10 TMI 547

2. The Calcutta High Court overturned a tax demand against a buyer who had invoices showing IGST payment but whose seller filed a 'NIL' return. The court faulted authorities for not investigating the seller first and allowed the buyer to present their case with full evidence.

This gives the buyer a second chance to prove they correctly claimed input tax credit and didn't suppress information.

Laxmi Traders vs Assistant Commissioner of State Tax, Coochbehar

(2024) 2 TMI 234

3. The Karnataka High Court ruled that businesses can claim input tax credit under the K-VAT Act regardless of when they filed their returns, as long as they paid the tax.

This decision upholds a previous ruling and reinforces the principle that input tax credit is an inherent right not limited by deadlines.

The court relied on the lack of a specific time limit for claiming credit in the K-VAT Act and established legal precedent.

Bharat Earth Movers Limited vs State of Karnataka

(2023) 1 TMI 341

4. The Kerala High Court overturned a decision denying input tax credit to a business simply because the credit wasn't reflected in the seller's GSTR filings (GSTR-2A). Citing a Supreme Court ruling, the court emphasized that businesses should have the opportunity to prove their input tax credit claims with evidence, regardless of discrepancies in GSTR forms.

AO is required to give an opportunity to the assessee in respect of his claim for Input Tax Credit, if there is difference between GSTR- 2A and GSTR-3B. If on examination of the evidence submitted by the assessee, the assessing officer is satisfied that the claim is bonafide and genuine, the assessee should be given the Input Tax Credit.

Merely on the ground that in Form GSTR-2A the tax to an extent of Input Tax Credit being claimed by the petitioner is not reflected should not be a sufficient ground to deny the claim of the assessee for Input Tax Credit.The case was returned to the tax authorities to re-evaluate the evidence and determine the validity of the credit claim.

Galaxy Traders (Prop. Praveen Bhaskaran) vs State of Kerala

(2023) 10 TMI 1204 :: (2023) 79 GSTL 210

5. The Madras High Court overturned a tax decision that denied a business input tax credit related to certain inputs, citing inconsistencies in the assessment and a lack of clear justification for the denial.

The case was sent back to the tax authorities to re-examine the evidence and allow the business a fair chance to present its case.

APL Apollo Tubes Ltd vs State Tax Officer (Intelligence)

(2024) 4 TMI 296

I hope you've found this write-up helpful.