R.K. Transport & Constructions Limited Vs State of Jharkhand through (Jharkhand High Court)
In a significant ruling, the Jharkhand High Court upheld the rights of a bona fide purchasing dealer, M/s R.K. Transport & Constructions Ltd., who had paid GST on services availed but was denied Input Tax Credit (ITC) due to the supplier’s non-filing of GSTR-1. Despite repeated follow-ups, the supplier failed to deposit the tax collected, thereby depriving the petitioner of rightful credit.
The Court recognized the petitioner’s exceptional diligence wherein petitioner not only paid all invoices with tax but also issued legal notices to the supplier for compliance, and made representations to tax authorities regarding the conduct of the supplier. Yet, the State GST officers failed to act, citing jurisdictional limitations since the supplier was registered under CGST.
Rejecting this plea, the Court held that under Section 76 of the Jharkhand GST Act, 2017, State authorities are empowered—and obligated—to act against any person, irrespective of their place of registration, who collects tax but fails to remit it to the government. The Court also dismissed the defence of res judicata as earlier proceedings did not involve merit-based adjudication.
Strongly censuring the inaction, the Bench directed the State GST authorities to initiate proceedings against the defaulting supplier within eight weeks and imposed costs of ₹1,00,000 on the supplier, payable to the petitioner.
This case highlights an exceptional scenario wherein the petitioner has exercised his prudence in such an effective manner that High Court has supported the petitioner unwaveringly.
FULL TEXT OF THE JUDGMENT/ORDER OF JHARKHAND HIGH COURT
Comments are closed.