Akal Trade Links Vs Assistant Commissioner (ST) (Madras High Court)
ITC Denial for want of LR /Weighment Slips Unsustainable Where Supplier has paid Tax– Madras HC in Akal Trade Links (A New Shield for Taxpayers)
The Madras High Court held that Input Tax Credit (ITC) cannot be denied merely because the recipient failed to produce lorry receipts or weighment slips when other substantive evidence supports the genuineness of the transaction. In the case concerning AY 2018-19, the Department denied ITC alleging that the petitioner had not proved actual movement of goods purchased from a registered supplier. However, the Court noted that the supplier was registered at the relevant time, had filed statutory returns, remitted GST, and the tax invoices contained vehicle details evidencing transport. The Court observed that further examination of the genuineness of supply was necessary and that absence of ancillary transport documents alone could not justify denial of ITC. Accordingly, the impugned order was set aside and the matter remanded for fresh consideration. The petitioner was allowed to furnish additional documents within 15 days, and the authority was directed to pass a reasoned order within three months after granting a personal hearing.
1. Introduction
The Madras High Court in M/s Akal Trade Links v. Assistant Commissioner (ST), Kangeyam Assessment Circle [W.P. No. 20601 of 2023, dated 05.06.2026] has delivered a significant ruling on the scope of Section 16(2) of the CGST Act, 2017. The judgment clarifies that Input Tax Credit cannot be denied on hyper-technical grounds when substantive conditions of tax payment and genuine supply are satisfied.
