Case Law Details
State of Uttar Pradesh & Anr Vs Vivo Mobile India Private Ltd & Ors (Supreme Court of India)
Introduction: In a significant ruling, the Supreme Court of India dismissed a Special Leave Petition filed by the State of Uttar Pradesh against the Allahabad High Court’s order quashing a GST demand of Rs. 235.52 Crores imposed on Vivo Mobile India Private Limited. The case centered on an Input Tax Credit dispute and the interpretation of the Goods and Service Tax Act, 2017.
Background of the Case: The GST Authorities raised a demand of Rs. 235.52 Crores against Vivo Mobile India Private Limited under Section 74(9) of the GST Act. The dispute arose from the cumulative computation of Input Tax Credit by Vivo Mobile for the months of February 2020 to August 2020.
GST Authorities’ Allegations and Legal Basis: The GST Authorities claimed that Vivo Mobile had claimed excess Input Tax Credit of Rs. 110 Crores, relying on Circular No. 113 dated 11.11.2019. The Circular suggested that cumulative adjustments could only be made until the date of filing of GSTR-1 declaration by suppliers.
Allahabad High Court’s Decision: The High Court held that Input Tax Credit is a substantive right under Section 16 of the GST Act, and the circular cannot override statutory provisions. It interpreted the proviso to Rule 36(4) of the GST Rules, creating a deeming fiction during the COVID-19 period, allowing a longer reconciliation period.
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