On 24.06.2022, the applicant contested the order of the Additional Commissioner Grade-2 (Appeals), Commercial Tax, Meerut (Respondent No. 1), for the period July 2017 to March 2018, as well as the order dated 22.10.2021 passed by the Deputy Commissioner, State Tax, Sector-4, Meerut (Respondent No. 2), for the same period.
The petitioner, who is a registered supplier with a valid GSTIN, has been authorised to utilise the mobile recharge services provided by M/s Bharti Airtel Ltd., located in Vibhuti Khand, Gomti Nagar, Lucknow, for the fiscal year 2017-18.
During this period, the petitioner availed services through recharge coupons from M/s Bharti Airtel Ltd., supporting a total of 7 tax invoices, which amounted to ₹1,58,46,502. As a result, the petitioner claimed an Input Tax Credit (ITC) of ₹28,52,370.
It was alleged by the GST department that the ITC was incorrectly claimed as the supplier (M/s Bharti Airtel Ltd) did not deposit the tax in the government treasury, invoking Section 16(2)(c) of the CGST Act.
It was claimed by the applicant that all the payments incurred via the banking channel, and he could not control whether the supplier deposits tax or submits the returns.
In Suncraft Energy Pvt. Ltd. (2023) and the Madras HC ruling in D.Y. Beathel Enterprises, the applicant relied on the ruling of the Apex court that held that the buyers must not be penalised for the defaults of the seller.
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In the case of Suncraft Energy (supra), the Hon’ble Supreme Court had time to recognise that the party that has filed the tax on the invoices being raised and not releasing the duties via the counterpart of the seller, the court desired to remand the case for making a due inquiry from the supplier.
Likewise, in the case of D.Y. Beathel Enterprises Vs. State Tax Officer (Data Cell), Tirunelveli, 2022 (58) G.S.T.L. 269 (Mad.), the Madras High Court opined that in the absence of non-performance of duty by the supplier, measures are to be opted against the supplier simultaneously, and the purchaser would not be suffered only.
On these two rulings, the court relied and took the stand of the applicant and permitted the writ petition.
| Case Title | M/S R.T. Infotech vs. Additional Commissioner Grade 2 And 2 Others |
| Case No. | WRIT TAX No. – 1330 of 2022 |
| Counsel For Appellant | R.R. Agrawal, Suyash Agarwal |
| Counsel For Respondent | C.S.C. |
| Allahabad High Court | Read Order |
