GST Update

Desk of CA Praveen Sharma – 911 Series (CAPS)

Himachal Pradesh High Court in the case of Shivalik Containers Pvt. Ltd.

The petitioner approached the High Court challenging a show cause notice and adjudication order passed for alleged wrongful availment of input tax credit.

The demand of around ?16.72 lakh was raised on the ground that the supplier had not deposited GST, even though ITC was claimed by the petitioner.

During the hearing, the State informed the Court that the supplier had later filed the pending returns and paid the GST along with interest.

It was also verified from the GST portal that after such payment by the supplier, the related ITC became available to the petitioner.

The petitioner submitted that once the supplier discharged the tax liability, the basis of the demand no longer survived.

The Court agreed that the tax payment by the supplier changed the factual position and required fresh consideration.

Accordingly, the High Court set aside the earlier order and directed the proper officer to reopen the case and re-adjudicate the ITC issue in accordance with law, with a final decision to be taken by 31 January 2026.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS