ITC Reversal Cannot Be Enforced Without Proceeding Against Defaulting Supplier: Telangana HC

Megha Engineering and lnfrastructure Limited Vs Union of lndia (Telangana High Court) Section 16(2)(c) is under challenge primarily on the ground that it imposes an onerous and disproportionate burden on the recipient by making the entitlement to input tax credit contingent upon the supplier’s compliance in remitting tax to the Government—an aspect entirely beyond the recipient’s control. Such a condition effectively penalizes a bona fide purchaser despite full payment of consideration along with tax, thereby leading to manifest arbitrariness and violation of Articles 14 and 19(1)(g) of ...