In a recent development, the Orissa High Court granted an interim stay against coercive measures in the case of OSL Securities Ltd. v. Union of India, favoring the Assessee. The case revolves around the challenge to the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017.
The petitioner, OSL Securities Ltd. filed a writ petition challenging the order dated December 27, 2023 issued by the Revenue Department under Section 73 of the Central GST Act. The challenge primarily focused on the validity of clause (c) of sub-section (2) of Section 16 of the Central Goods and Services Tax Act.
The Impugned Order was based on the grounds that the supplier had not reported the transaction with the Petitioner in Form GSTR-3B, despite the Petitioner paying taxes on the supplies received.
The Orissa High Court, in Writ Petition (C) No. 2695 OF 2024, granted interim relief in favor of the Petitioner. The court directed that no coercive action should be taken during the pendency of the writ petition, provided that the Petitioner deposits 20 percent of the tax payable amount.
The relevant provision under scrutiny is Section 16(2)(c) of the Central Goods and Services Tax Act, which outlines the conditions for claiming input tax credit.
According to this section, a registered person cannot claim credit for any input tax related to a supply of goods or services unless the tax charged for that supply has been paid to the government, either in cash or through the utilization of admissible input tax credit.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
