Shree Karni Electrovision Vs Union of India (Rajasthan High Court)
Summary: The Rajasthan High Court dismissed the writ petition filed by M/s Shree Karni Electrovision challenging the validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 read with the Rajasthan Goods and Services Tax Act, 2017 and seeking quashing of an order dated 24.11.2022. The petitioner, engaged in supplying electronic goods, had procured goods from M/s Techno Kart India Limited, a retail arm of the Videocon Group, for Rs.59,42,860.91/-. Tax of Rs.13,00,000/-, comprising Rs.6,50,000/- CGST and Rs.6,50,000/- RGST, arose on transactions during December 2017 to January 2018. The petitioner claimed Input Tax Credit on the basis that the supplier was responsible for depositing the corresponding tax with the Government. The supplier subsequently became insolvent and proceedings were initiated under the Insolvency and Bankruptcy Code, 2016. :contentReference[oaicite:1]{index=1}
The petitioner contended that the respondents had failed to lodge their tax claim against the supplier in the insolvency proceedings and could not thereafter impose the unpaid tax liability upon the purchaser under Section 16(2)(c). Reliance was placed upon Ghanashyam Mishra & Sons (P.) Ltd. Vs. Edelweiss Asset Reconstruction Co. Ltd., [2021] 126 taxmann.com 132 (SC), on the effect of approval of a resolution plan and extinguishment of claims not forming part of the plan. The respondents, however, argued that Section 16(2)(c) imposes an absolute condition requiring the tax charged on a supply to have actually been paid to the Government and that wrongly availed ITC could consequently be recovered from the purchaser. :contentReference[oaicite:2]{index=2}
