- Supreme Court Notice Issued: The Apex Court of India has issued notice in a Special Leave Petition regarding the denial of input tax credit (ITC) to a purchasing dealer due to the retrospective cancellation of the supplier’s GST registration, raising important questions about ITC denial and the treatment of bona fide transactions.
- Key Legal Issues: The petitioner argues that ITC should not be denied based solely on retrospective registration cancellation, especially when the supplier was compliant at the time of the transaction. This denial is challenged as arbitrary and disproportionate, shifting the burden of supplier defaults onto the purchaser without evidence of wrongdoing.
- Potential Impact on ITC Jurisprudence: The case could lead to a significant recalibration of how ITC eligibility is assessed, emphasizing compliance at the time of supply rather than subsequent administrative actions against suppliers. The Supreme Court has set a returnable date for the notice on December 8, 2025.
Source Darda Advisors
