Case Details: Sahil Enterprises vs. Union of India (2026) 38 Centax 116 (Tripura)
Judiciary and Counsel Details
- M.S. Ramachandra Rao, CJ. & S. Datta Purkayastha, J.
- S/Shri Naveen Bindal, Mukul Singla & Prabal Kumar Ghosh, Advs., for the Petitioner.
- S/Shri Bidyut Majumder, Biplabendu Roy, Elembrok Debbarma, Advs. & Bibhal Nandi Majumder, Sr. Adv., for the Respondent.
Facts of the Case
The petitioner challenged the denial of input tax credit (ITC) on the ground that the supplier had failed to deposit the GST collected from the petitioner with the Government. It was contended that the transaction was bona fide, GST was paid to the supplier, and it was impossible for a purchaser to verify whether the supplier had remitted the tax to the Government. It was argued that denial of ITC in a bona fide transaction was invalid. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that Section 16(2)(c) of the CGST Act, though constitutionally valid, can be applied only where the transaction is not bona fide, collusive, or fraudulent. The Court observed that a bona fide purchaser cannot be burdened with the task of verifying whether the supplier has deposited tax collected. Since the transaction between the petitioner and the supplier was bona fide and not collusive or fraudulent. Therefore, the Court ordered that the ITC to be allowed without delay.
List Of Cases Cited
- Aastha Enterprises v. State of Bihar — (2023) 9 Centax 270 (Pat.) = 2023 (77) G.S.T.L. 372 (Pat.) = 2023 SCC Online Pat 4395 ( para 42) — Distinguished [Para 48]
- B.R. Enterprises v. State of U.P. — 2001 taxmann.com 1845 (SC) — Referred [Para 25]
- Baby Marine (Eastern) Exports v. Union of India — (2025) 33 Centax 389 (Mad.) = 2025 (8) TMI 791 (Madras) ( para 42) — Distinguished [Para 48]
- Chief Commissioner of Central GST v. Safari Retreats (P.) Ltd. — [2024] 167 taxmann.com 73 = 2024 90 G.S.T.L. 3 = 2024 106 GST 250 (SC) = (2025) 2 SCC 523 — Referred [Para 48]
- Commissioner of Trade and Tax Delhi v. Arise India Ltd. — 2022 (60) G.S.T.L. 215 (S.C.), — Followed [Para 36]
- Commissioner Trade and Tax Delhi v. Shanti Kiran India (P.) Ltd. — (2025) 35 Centax 222 (S.C.),, — Followed [Para 43]
- CST v. Radhakrishan — (1979) 118 ITR 534 (SC) — Referred [Para 26]
- Laxmipat Singhania v. CIT — AIR 1969 SC 501 — Referred [Para 44]
- M. Trade Links v. Union of India — (2024) 19 Centax 131 (Ker.) = 2024 (87) G.S.T.L. 4 (Ker.) = 2023 SCC online Ker 11369 ( para 42) — Distinguished [Para 48]
- Mahaveer Kumar Jain v. CIT — [2018] 92 taxmann.com 340 (SC) = [2018] 255 Taxman 161 (SC) — Referred [Para 44]
- MCLEOD Russel India Ltd. v. Union of India — [2025] 181 taxmann.com 322 (Gauhati) — Referred [Para 37]
- National Plasto Moulding v. State of Assam — (2024) 21 Centax 182 (Gau.) = 2024 (89) G.S.T.L. 82 (Gau.) — Referred [Para 36]
- On Quest Merchandising India (P.) Ltd. v. Government of NCT of Delhi — 2018 (10) G.S.T.L. 182 (Del.), — Followed [Para 34]
- Shanti Kiran India (P) Ltd v. Commissioner Trade and Tax — [STA No. 34 of 2012, dated 4.1.2013], — Followed [Para 34]
- Shree Krishna Chemicals v. Union of India — (2025) 28 Centax 105 (M.P.) = 2025 (97) G.S.T.L. 199 (M.P.) = 2025 (2) TMI 1006 (M.P) ( para 42) — Distinguished
- Thirumalakonda Plywoods v. Asstt. Commissioner — (2023) 8 Centax 276 (A.P.) = 2023 (76) G.S.T.L. 172 (A.P.) = 2023 SCC Online AP 1476 ( para 42) — Distinguished [Para 48]
