Supreme Court Questions Denial of Input Tax Credit Due to Seller's GST Cancellation Roshan Sharma's Plea Challenges ITC Denial; Notice Issued for Further Hearing
In a significant development concerning the Goods and Services Tax (GST) framework, the Supreme Court of India has issued notice in response to a plea by Roshan Sharma, questioning the denial of Input Tax Credit (ITC) based solely on the cancellation of the seller’s GST registration. The apex court, presided over by Justices J.B. Pardiwala and K.V. Viswanathan, heard the petition for Special Leave to Appeal filed by Sharma against the decision of a lower court which refused relief citing an alternative remedy.
The crux of Sharma's argument, as presented by his legal counsel Mr. Vinay Shraff, hinges on the contention that ITC should not be disallowed simply because the GST registration of the vendor from whom goods were purchased was cancelled. This, according to Sharma's counsel, is an unjustified basis for denying ITC, which is critical for the functioning of businesses under the GST regime.
The Supreme Court acknowledged the prima facie merit in Sharma's arguments, leading to the issuance of a notice, returnable by December 8, 2025. The case highlights the ongoing challenges faced by taxpayers in navigating the complexities of GST compliance and the legal remedies available.
This judgment could have far-reaching implications for businesses struggling with similar issues and underscores the necessity for clarity in the application of GST laws. The decision to issue notice suggests the Supreme Court's willingness to examine the legal validity of denying ITC due to circumstances beyond the purchaser's control, potentially setting a precedent for future cases.
Bottom Line:
Goods and Services Tax (GST) - Input Tax Credit (ITC) cannot be denied solely on the ground that the GST registration of the seller of goods has been cancelled.
Statutory provision(s): Goods and Services Tax (GST), Input Tax Credit (ITC)
Roshan Sharma v. Deputy Commissioner of Revenue, State Tax, (SC) : Law Finder Doc Id # 2824928
