2025 (7) TMI 978 - HC - GST

Challenge to provisions of Section 16(2)(c) of the CGST/SGST Act - assessee availing input tax credit had to ensure that the supplier of the inputs of the assessee had actually paid his output tax to the Government - HELD THAT - It is inclined to accede to the prayers of the Learned Counsel for the appellant and accordingly while dismissing the Writ Appeal in its challenge against the statutory provisions one month from today is extended the time limit granted by the Learned Single Judge to the appellant herein for claiming the benefit of the two circulars aforementioned as also for raising the additional issue projected by them with regard to the errors that crept into the Form GSTR-3B before the adjudicating authority. Accordingly if the appellant herein approaches the assessing authority concerned within a month from today pointing out the irregularities aforementioned then the said assessing authority shall consider the application of the appellant as one that is preferred pursuant to the liberty granted by the Learned Single Judge and proceed to adjudicate the same expeditiously. Save for this limited modification the rest of the findings of the Learned Single Judge are upheld and the Writ Appeal disposed accordingly.

Summary

The Kerala High Court, in this Writ Appeal, upheld the validity of Section 16(2)(c) of the CGST/SGST Act, which requires an assessee availing input tax credit to ensure the supplier has paid the output tax, affirming the earlier Single Judge and Division Bench rulings (Nahasshukoor v. Assistant Commissioner [2024 123 GSTR 44 (KER)]). The appellant's challenge to this statutory provision was dismissed.However, the Court granted the appellant additional relief regarding procedural errors in Form GSTR-3B filings. Although these mistakes were not raised earlier, the Court extended by one month the liberty previously granted by the Single Judge to claim benefits under Circular No. 183/15/2022-GST and Circular No. 193/5/2023-GST. The appellant may now notify the assessing authority of such errors within this extended period. The assessing authority is directed to consider and adjudicate these claims expeditiously as part of the liberty granted.In sum, the Court dismissed the appeal on the substantive legal issue but allowed procedural latitude to correct filing errors and claim circular benefits, maintaining the core statutory interpretation while ensuring fairness in administrative processing.