Input Tax Credit
13 articles
When Is a Building a “Plant”? The Supreme Court in Safari Retreats on Section 17(5)(d), Blocked Credit and the Functionality Test
A mall developer with more than Rs. 34 crores of input tax credit was told that Section 17(5)(d) blocked it. The Supreme Court upheld the blocked-credit clauses, refused to read “plant or machinery” as “plant and machinery”, and held that whether a building is a “plant” turns on a fact-specific functionality test — with hotels and cinema theatres excluded.
7 min readA Refund Won on Appeal Can Still Be Withheld: Delhi High Court on Section 54(11) of the CGST Act and the Weight of a Pending Investigation
An exporter won five refund appeals, but the Commissioner withheld Rs. 3,15,30,605 under Section 54(11) of the CGST Act. The Delhi High Court dismissed the writ: a proposed appeal alone is not enough, but a pending investigation plus a reasoned opinion of malfeasance or fraud is.
14 min readMasterminds Yes, Backdating No: Delhi High Court Holds Section 122(1A) CGST Reaches Non-Taxable Persons but Only for Conduct on or After 1 January 2021
Three former directors were each fined ₹24,99,88,069 personally, the same amount as the company, for an alleged circular-trading scheme. The Delhi High Court has now answered two questions that split the High Courts: who can be penalised under Section 122(1A), and for which period. Its answer favours the Revenue on the first and the assessee on the second.
13 min readActual Credit, Not Available Credit: Delhi High Court Upholds a ₹2.31 Crore Anti-Profiteering Order Made After the Reckitt Benckiser Remand
A Bhubaneswar developer argued that the anti-profiteering authorities had simply swapped 'purchase value' for 'turnover' after the Reckitt Benckiser remand, and that unclaimed pre-GST CENVAT credit should offset its post-GST credit. The Delhi High Court disagreed on both counts.
14 min readDifferent Statute, Different Subject Matter: Delhi High Court Refuses to Let a Concluded DGGI Fraud Probe Shield a Separate Section 73 Demand
A script-services company facing a ₹10.57 crore input tax credit demand argued that a state GST officer's proceedings were barred because the Directorate General of GST Intelligence had already investigated it — and that investigation had since concluded. The Delhi High Court disagreed on every ground: the statutory appeal was never filed, the writ came two years late, and the two notices, issued under different sections for different reasons, were never the same subject matter to begin with.
13 min read629 Noticees, One Order: Delhi High Court Declines a GST Writ Challenge, Distinguishing ASP Traders on Natural Justice
When a single Order-in-Original runs to 1,881 pages and names 629 firms and individuals in an alleged fake-invoicing racket, does an individual noticee's claim that its reply was never considered open the door to a writ petition? The Delhi High Court says no — and distinguishes the Supreme Court's ASP Traders on the ground that a mass adjudication order is not the same as an unreasoned order against a single assessee.
14 min readSection 61 Is Not the Only Gateway: Allahabad High Court Sustains a Section 74A GST Notice Issued Without Prior Return Scrutiny
Eighteen sub-contractors, a works-contract chain running into crores, and a jurisdictional argument that Section 61 scrutiny must precede every GST demand. The Allahabad High Court draws the line between a Section 61-triggered notice and one built on independent verification, and holds the two are not interchangeable gateways.
13 min readOne Tax Period, One Notice: Bombay High Court's Nagpur Bench Reaffirms That a Section 74 GST Notice Cannot Club Multiple Financial Years, Pending a Larger Bench Reference
A show cause notice covering financial years 2019-20 to 2021-22, alleging suppression of taxable value, was quashed because the CGST Act ties assessment and its five-year limitation to each financial year separately. The Bombay High Court held itself bound by its own precedent over a contrary Delhi High Court view — even after the Supreme Court declined to interfere with that view — but preserved the Revenue's liberty to revive the case if a pending Larger Bench reference goes the other way.
13 min readOrder-in-Appeal Is Binding Until Reversed: Telangana High Court Quashes a GST Refund Rejection Founded on a Department's Mere Decision to Appeal
A GST refund of Rs. 19.33 crore, consequential to an appellate order that had already set aside the underlying demand, was rejected because the Department had internally decided the appellate order was 'not legal and proper' and intended to challenge it before the GST Appellate Tribunal — an appeal it had not yet even filed. The Telangana High Court held that an Order-in-Appeal remains binding under Section 107(16) of the CGST Act until actually stayed, modified or set aside, and that a refund can be withheld pending further proceedings only through the specific mechanism of Section 54(11), not by administrative fiat.
13 min readNo Hearing, No Time to Pay: Bombay High Court Quashes a Section 74A GST Order and Fixes Personal Cost on the Officer Who Passed It
A GST demand order recited that personal hearing was 'not applicable' and was signed off while the taxpayer's sixty-day window to pay up and avoid penalty was still open. The Bombay High Court quashed it on both grounds, held the alternate remedy of a statutory appeal no bar, and ordered the department to recover its Rs. 50,000 cost from the officer who passed the order.
14 min readBlocked Is Not Paid: Delhi High Court Holds Input Tax Credit Restricted Under Rule 86A Cannot Satisfy the Mandatory Pre-Deposit for a GST Appeal
A registered person facing a Rs. 33.32 lakh GST demand wanted Rs. 3.33 lakh of its own input tax credit — already frozen under Rule 86A — treated as satisfying the ten per cent pre-deposit needed to appeal. The Delhi High Court refused: a restriction under Rule 86A prevents debit from the electronic credit ledger, it does not appropriate the credit toward any demand, and the two authorities holding otherwise on unrestricted credit had no application to credit that is actually blocked.
13 min readBona Fide Buyer, Defaulting Seller: Calcutta High Court Curbs the Mechanical Use of Section 74 to Deny GST Input Tax Credit
A logistics company claimed input tax credit on invoices from a supplier who later stopped filing returns. The department invoked Section 74's fraud-based extended period to raise a Rs. 6.3 crore demand two years after ordinary limitation had run out. The Calcutta High Court quashed the order, applying binding precedent that a buyer's credit cannot be held hostage to a seller's default, and that dressing up an ordinary demand as fraud does not extend the clock.
13 min readBland Recitals Will Not Do: Supreme Court Quashes a Section 74 GST Notice for Want of Foundational Facts of Fraud or Suppression
An audit objection, a notice parked in the department's own 'call book', and a bare assertion of suppression were not enough to invoke GST's extended limitation period. The Supreme Court draws a sharp line between reciting the words of Section 74 and actually pleading the facts that justify it.
13 min read