Inam Impex Private Limited Vs Assistant Commissioner (ST) (Telangana High Court)
Telangana HC Declines Vires Challenge to Section 16(2)(c); Directs Taxpayer to File GST Appeal in Excess ITC Case (AY 2021-22)
Introduction
Disputes relating to Input Tax Credit (ITC), especially those linked to supplier compliance under Section 16(2)(c) of the GST law, continue to generate significant litigation. Taxpayers often argue that ITC should not be denied when payments are made against valid invoices, even if suppliers default in tax payment.
In a recent decision dated 31.03.2026, the Telangana High Court addressed such a dispute involving M/s. Inam Impex Private Limited. The Court refused to entertain a constitutional challenge to Section 16(2)(c) and instead directed the petitioner to pursue the statutory appellate remedy, reinforcing the principle of exhaustion of alternative remedies.
Case Background
The petitioner challenged:
- Order-in-Original dated 30.12.2025 for AY 2021-22
- Demand of tax, interest, and penalty for alleged excess ITC
Key facts:
- GST registration of the petitioner was cancelled on 09.09.2024 (unchallenged)
- ITC was denied on the ground of excess claim compared to supplier declarations
- Petitioner also challenged the constitutional validity (vires) of Section 16(2)(c)
The petitioner contended that:
- Payments were made against valid invoices
- ITC was availed legitimately
- Denial was due to supplier default, which should not impact the recipient
Key Legal Issue
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