Technical limitations cannot be ground to deny input tax credit under GST - HC
PrintListen to this Article
0:00
0:00
The Delhi High Court has said that the rights of Goods & Services Tax (GST) assessees ‘cannot be subjugated’ to the poor and inefficient software systems adopted by the authorities. The ruling is likely to benefit assessees who suffer due to technical glitches.
“The software systems adopted by the respondents have to be in tune with the law, and not vice-versa. The system limitations cannot be a justification to deny the relief, to which the petitioner is legally entitled,” the court ruled in a matter related to denial of use of unutilised input tax credit (ITC).
In a petition filed with the HC, the grievance of the petitioner was that due to the inaction of the respondents (State GST authority) and their failure to allow smooth migration of the credit standing in the account of unutilised input tax, the petitioner could not use and exploit the ITC while making exports in the months of July and August, 2017. Accordingly it was forced to shell out over ₹1.37 crore which would not have been the case, had it been able to utilise its ITC which had accumulated even prior to the enforcement of the GST regime.
The court heard both the sides and observed that the petitioner cannot be made to suffer on account of failure on the part of the respondents in devising smooth transition to GST regime w.e.f. July 1, 2017 from the erstwhile indirect taxation structure. “The business activity in the country cannot be expected to come to a standstill, only to await the respondents making the GST system workable,” it said.
According to the court, the failure of the respondents in first putting a workable system in place, before implementing the GST regime, reflects poorly on the concern that they have shown to the difficulties that the trade faced throughout the length and breadth of the country. “Unfortunately, even after passage of over two years, the respondents have not remedied their omissions and failures by taking corrective steps. They continue to take shelter in the limitations in, and the inability of their software systems to grant refund, despite the same being justified,” the court said. #casansaar (Source - PTI, The Hindu Business Line)
“The software systems adopted by the respondents have to be in tune with the law, and not vice-versa. The system limitations cannot be a justification to deny the relief, to which the petitioner is legally entitled,” the court ruled in a matter related to denial of use of unutilised input tax credit (ITC).
In a petition filed with the HC, the grievance of the petitioner was that due to the inaction of the respondents (State GST authority) and their failure to allow smooth migration of the credit standing in the account of unutilised input tax, the petitioner could not use and exploit the ITC while making exports in the months of July and August, 2017. Accordingly it was forced to shell out over ₹1.37 crore which would not have been the case, had it been able to utilise its ITC which had accumulated even prior to the enforcement of the GST regime.
The court heard both the sides and observed that the petitioner cannot be made to suffer on account of failure on the part of the respondents in devising smooth transition to GST regime w.e.f. July 1, 2017 from the erstwhile indirect taxation structure. “The business activity in the country cannot be expected to come to a standstill, only to await the respondents making the GST system workable,” it said.
According to the court, the failure of the respondents in first putting a workable system in place, before implementing the GST regime, reflects poorly on the concern that they have shown to the difficulties that the trade faced throughout the length and breadth of the country. “Unfortunately, even after passage of over two years, the respondents have not remedied their omissions and failures by taking corrective steps. They continue to take shelter in the limitations in, and the inability of their software systems to grant refund, despite the same being justified,” the court said. #casansaar (Source - PTI, The Hindu Business Line)
Category : GST | Comments : 0 | Hits : 1043
In a significant judgment, the Bombay High Court has clarified that summons issued under the Central Goods and Services Tax (CGST) Act are meant strictly for inquiry and recording of statements, and c...
Please click on the link below to view the gross and net GST revenue collections for the month of Jan, 2026. https://tutorial.gst.gov.in/downloads/news/final_approved_monthly_gst_data_for_pub...
Jan 23rd, 2026 An advisory on reporting of taxable value and tax liability under RSP-based valuation in e-Invoice, e-Way Bill and GSTR-1 / GSTR-1A / IFF has been issued for the information ...
Comments