Calcutta HC: ITC Not Permitted, Amount Paid to 3rd Party Instead of the Particular Dealer

The writ petitioner is not qualified to take advantage of the ITC since he did not pay the amount to the selling dealer and did it to a third party, the Calcutta High Court ruled.

The bench comprising Chief Justice T.S. Sivagnanam and Justice Supratim Bhattacharya has noted that the writ petitioner cannot insert words into a statute to claim entitlement to input tax credit without having paid the amount to the selling dealer through a third party, as per specific instructions.

The petitioner has contested the decision of the West Bengal Taxation Tribunal, which denied input tax credit due to payments made to a third party on behalf of the selling dealer.

The court emphasized the well-established legal principle that input tax credit is a concession provided by the legislator, accessible only when the prescribed conditions are met. Sub-rule 8 of Rule 19 explicitly states that payment to the selling dealer must be made through a check, demand draft, or electronic mode.

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Affirming that concessions can be subject to conditions, the court maintained that if the specified conditions are not fulfilled, the concession becomes unavailable. Consequently, the tribunal’s decision was deemed deserving of confirmation.