The Delhi High Court has ruled that factual disputes related to Input Tax Credit (ITC) and Reverse Charge Mechanism (RCM) must be raised in Section 107 appeals rather than through writ proceedings. This decision categorically outlines the proper legal forum for such disputes.
Disputes Over ITC & RCM Must Be Raised in S. 107 Appeal: Delhi HC
The Delhi High Court has recently clarified the proper avenues for addressing disputes concerning Input Tax Credit (ITC) and Reverse Charge Mechanism (RCM). The court emphasized that such disputes should be pursued through appeals under Section 107 of the Goods and Services Tax (GST) Act rather than through writ petitions.
The ruling comes in response to cases where taxpayers sought clarity on their tax liabilities concerning ITC and RCM, often resorting to writ proceedings as the first option. The bench articulated that Section 107 provides a dedicated appellate mechanism designed to resolve such issues, which are essentially factual in nature and require thorough examination of records and supporting documents.
The judgment underlines the importance of adhering to statutory procedures, as the appellate authority is best positioned to comprehensively analyze the factual matrix and render decisions based on evidence. This reiteration encourages taxpayers to properly navigate the legal pathways available under tax laws.
Tax practitioners should take note of this ruling, as it reinforces the structured approach in addressing tax disputes and the necessity of appealing to the appropriate forum for resolution, thereby ensuring swift and effective dispute resolution.
Citations
- Delhi HC (2026) Unreported
