- Tripura High Court held that Input Tax Credit (ITC) cannot be denied to a bona fide purchaser if the supplier fails to remit tax.
- The Court found no evidence of fraud or collusion by the purchaser, and proceedings were under Section 73 (not Section 74, which deals with fraud).
- The Court read down Section 16(2)(c) of the CGST Act to prevent arbitrary denial of ITC, stating purchasers cannot be expected to ensure supplier compliance.
- The demand order was set aside and the Department was directed to allow the ITC claimed by the petitioner.
- The ruling provides relief to genuine purchasers facing ITC denial due to supplier defaults, absent any fraud or wrongdoing.
Source: elplaw.in
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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