Case Law Details
Lohum Materials Private Limited Vs Union of India (Allahabad High Court)
Challenge to CGST Amendments Over Blocking ITC Without Recipient Fault Heard by High Court; Allahabad High Court Reviews GST Provisions Restricting ITC Despite Valid Tax Invoices; HC Considers Plea Against Denial of Input Tax Credit for Subsequent Supplier Non-Compliance; GST ITC Dispute Reaches Allahabad High Court Over Sections 16 and 38 Amendments.
The Allahabad High Court heard a challenge to the amended provisions of Sections 16(2)(aa), 16(2)(ba), and 38(2)(b) of the CGST Act, 2017. The petitioner contended that recipients of goods or services were being prejudiced despite having paid tax along with the full value of goods/services and possessing valid tax invoices. It was argued that the right to avail Input Tax Credit (ITC) had been arbitrarily obstructed due to subsequent events occurring after receipt of goods/services. The Court observed that the matter required consideration and issued notice to the Attorney General of India and the Advocate General of Uttar Pradesh. Time was granted for filing affidavits, and the stay request was deferred.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. On oral prayer, learned counsel for the petitioner is permitted to implead the State of U.P. as party respondent no. 4, during course of the day.
2. Let notice of the petition be served on learned Standing Counsel, today itself.
3. Heard Sri Ankit Kannaudia alongwith Ms. Pooja Talwar, learned counsel for the petitioner; Sri Amit Mahajan, learned counsel for the State respondent no.3; Sri Krishna Agarawal, learned counsel for the CGST and Sri Arvind Kumar Mishra, learned Standing Counsel for respondent no.4.
4. Challenge has been raised to the amended provisions of Section 16(2)(aa), 16(2)(ba) and 38(2)(b) of the CGST Act, 2017. Primary submission is, the recipient of goods/services has been prejudiced, for no fault. Though tax amount may have paid for together with full value of goods/services and though such a recipient of goods/services, may have received the goods against valid Tax Invoice, yet its primary right under the GST laws (to avail ITC), has been arbitrarily obstructed. Also, it has been contended that such ITC may not be restricted for reason of subsequent events that may unfold after receipt of goods, by the recipient.
5. Matter requires consideration. Issue notice to the Attorney General of India and Advocate General of Uttar Pradesh.
6. Learned counsel for the revenue prays for and is granted four weeks’ time to file counter affidavit. Petitioner shall have two weeks thereafter to file rejoinder affidavit.
7. List this case in the week commencing 13.07.2026.
8. Prayer for stay may be considered after exchange of affidavits.
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