Bona Fide Purchaser Not Liable for Supplier’s default to deposit GST: Tripura HC

Sahil Enterprises Vs Union of India (Tripura High Court) The Tripura High Court held that a bona fide purchaser cannot be denied Input Tax Credit (ITC) merely because the supplier failed to deposit GST collected with the Government. Examining Section 16(2)(c) of the CGST Act, 2017, the Court found that the provision, if applied literally, places an impossible and onerous burden on purchasers who have no mechanism to verify a supplier’s tax payment. To prevent arbitrariness and double taxation, the Court “read down” the provision, restricting its application only to collusive, fraudulent,...