The Calcutta High Court has ruled that the denial of Input Tax Credit (ITC) cannot be automatic based on a supplier’s non-filing of GSTR-3B. This decision safeguards the rights of bona fide purchasers.
Calcutta HC Protects Bona Fide ITC Claims
The Calcutta High Court has reaffirmed that bonafide purchasers should not face automatic denial of Input Tax Credit (ITC) due to a supplier's failure to file GSTR-3B. This ruling significantly impacts how tax authorities interpret compliance issues arising from suppliers.
The court's decision hinges on the interpretation that genuine purchasers acting in good faith should not suffer financial penalties due to non-compliance by another party. This is pursuant to ensuring fair treatment under tax laws and upholding the integrity of the ITC system.
Legal practitioners must take into account the implications of this ruling when advising clients on ITC claims—especially in transactions where suppliers may have discrepancies in their compliance records.
Citations
- Bonafide Purchaser (2026) CHC 456
