{"id":8984,"date":"2026-05-06T17:21:01","date_gmt":"2026-05-06T11:51:01","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=8984"},"modified":"2026-05-07T12:04:31","modified_gmt":"2026-05-07T06:34:31","slug":"hc-reads-down-section-162c-to-protect-bona-fide-itc-claims","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/hc-reads-down-section-162c-to-protect-bona-fide-itc-claims","title":{"rendered":"HC Reads Down Section 16(2)(c) to Protect Bona Fide ITC Claims"},"content":{"rendered":"<pre><strong>Case Details:<a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000419292\/section-162c-rule-364-are-to-be-read-down-to-allow-itc-to-bona-fide-recipients-despite-suppliers-fault-hc\"> Instakart Services Pvt. Ltd. vs. Union of India (2026) 42 Centax 48 (Kar.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>S.R.Krishna Kumar,<\/strong> J.<\/li>\n<li><strong>S\/Shri Tarun Gulati,<\/strong> Sr. Counsel &amp; <strong>Pradeep Nayak,<\/strong> Adv., for the Petitioner.<\/li>\n<li><strong>S\/Shri Madanan Pillai,<\/strong> CGC, <strong>Hema Kumar,<\/strong> AGA &amp; <strong>M. Unnikrishnan,<\/strong> Adv., for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The petitioner, a private limited company registered under the CGST\/KGST Act and engaged in logistics services, filed a writ petition challenging the validity of Section 16(2) (c) of the CGST\/Karnataka GST (KGST) Act and Rule 36(4) of the CGST\/KGST Rules. The petitioner sought alternative relief, namely that the said provisions be read down to allow input tax credit (ITC) to bona fide recipients who had complied with the other conditions under Section 16(2), despite the non-payment of tax by suppliers. A restraint against the enforcement of the said provisions against the petitioner was also sought. The issue framed concerned constitutional validity vis-\u00e0-vis Articles 14, 19(1) (g), 265 and 300A or the need to read down the provisions. The matter was placed before the High Court.<\/p>\n<h2><em>High Court Held<\/em><\/h2>\n<p>The High Court held that co-ordinate benches had examined the identical controversy, and that the petition deserved disposal in accordance with such judgments. The Court held that the provisions contained in Section 16(2) (c) of the CGST\/KGST Act and Rule 36(4) of the CGST\/KGST Rules were to be read down. It was held that such reading down would allow the benefit of ITC to bona fide recipients who had complied with all other conditions under Section 16(2) of the CGST\/KGST Act, despite any fault, lapse or non-payment of tax to the government by suppliers. Accordingly, the petition was disposed of in these terms.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2020%20(32)%20G.S.T.L.%20726%20(P%26H.)&amp;itemType=AP\">Adfert Technologies (P.) Ltd. v. Union of India<\/a> \u2014 2020 (32) G.S.T.L. 726 (P&amp;H.) \u2014 Referred [Para 5.1]<\/li>\n<li>Asstt. CIT v. Om Prakash Gattani \u2014 (2000) 2 GLR 169 \u2014 Referred [Para 5.1]<\/li>\n<li>Babaji Kondaji Garad v. Nasik Merchants Cooperative Bank Ltd. \u2014 (1984) 2 SCC 50 \u2014 Referred [Para 5.1]<\/li>\n<li>Bharat Steels v. Commercial Tax Officer \u2014 2015 SCC OnLine Mad 9136 \u2014 Referred [Para 5.1]<\/li>\n<li>Bimal Chadnra Banerjee v. State of M.P. 1970(2) SCC 467 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2022%20(57)%20G.S.T.L.%20226%20(Ori.)&amp;itemType=AP\">Bright Star Plastic Industries v. Additional Commissioner of Sales Tax<\/a> \u2014 2022 (57) G.S.T.L. 226 (Ori.) \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=1999%20(112)%20E.L.T.%20353%20(S.C.)&amp;itemType=AP\">CCE v. Dai Ichi Karkaria Ltd.<\/a> \u2014 1999 (112) E.L.T. 353 (S.C.) \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2014%20(302)%20E.L.T.%20487%20(All.)&amp;itemType=AP\">CCE v. Juhi Alloys Ltd.<\/a> \u2014 2014 (302) E.L.T. 487 (All.) \u2014 Referred [Para 5.1]<\/li>\n<li>CCE v. Kay Kay Industries \u2014 2013 (295) E.L.T. 117 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2013%20(294)%20E.L.T.%20394%20(Jhar.)&amp;itemType=AP\">CCE v. Tata Motors Ltd.<\/a> \u2014 2013 (294) E.L.T. 394 (Jhar.) \u2014 Referred [Para 5.1]<\/li>\n<li>Cellular Operators Association of India v. T.R.A. \u2014 2016(7) SCC 703 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2022%20(60)%20G.S.T.L.%20215%20(S.C.)&amp;itemType=AP\">CTE v. Arise India Ltd.<\/a> \u2014 2022 (60) G.S.T.L. 215 (S.C.) \u2014 Referred [Para 5.1]<\/li>\n<li>Devarsh P.Patel v. Dy. \u2014 CIT 2018 (9) TMI 1635 (Guj) \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2022%20(58)%20G.S.T.L.%20269%20(Mad.)&amp;itemType=AP\">D.Y. Beathel Enterprises v. State Tax Officer (Data Cell), Tirunelveli<\/a> \u2014 2022 (58) G.S.T.L. 269 (Mad.) \u2014 Referred [Para 5.1]<\/li>\n<li>Dy. CIT v. Pepsi Foods Limited \u2014 (2021) 7 SCC 413 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=1999%20(106)%20E.L.T.%203%20(S.C.)&amp;itemType=AP\">Eicher Motors Ltd v. UOI<\/a> \u2014 1999 (106) E.L.T. 3 (S.C.) \u2014 Referred [Para 5.1]<\/li>\n<li>Gheru Lal Bal Chand v. State of Haryana \u2014 [2013] 29 taxmann.com 484 (Punjab &amp; Haryana) \u2014 Referred [Para 5.1]<\/li>\n<li>Global Energy Pvt. Ltd., v. Central Electricity Regulatory Commissioner \u2014 (2009) 15 SCC 570 \u2014 Referred [Para 5.1]<\/li>\n<li>Govindan &amp; Co v. The State of Tamil Nadu \u2014 (1975) 35 STC 50 (Mad.) \u2014 Referred [Para 5.1]<\/li>\n<li>Gupta Modern Breweries v. State of J&amp;K \u2014 (2007) 6 SCC 317 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2005%20(189)%20E.L.T.%20135%20(Tri.-LB)&amp;itemType=AP\">Hico Enterprises v. Commissioner of Customs, Mumbai<\/a> \u2014 2005 (189) E.L.T. 135 (Tri.-LB) \u2014 Referred [Para 5.1]<\/li>\n<li>Indian Express Newspaper (Bombay) Pvt. Ltd, v. UoI \u2014 (1985) 1 SCC 641 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2003%20(156)%20E.L.T.%20945%20(Bom.)&amp;itemType=AP\">Indian Seamless Steel and Alloys Ltd. v. Union of India<\/a> \u2014 2003 (156) E.L.T. 945 (Bom.) \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2014%20(310)%20E.L.T.%20833%20(Guj.)&amp;itemType=AP\">Indsur Global Ltd. v. Union of India<\/a> \u2014 2014 (310) E.L.T. 833 (Guj.) \u2014 Referred [Para 5.1]<\/li>\n<li>Jain Steels &amp; Alloys Mfrs. v. CCT \u2014 2019 SCC OnLine Kar 3943 \u2014 Referred [Para 5.1]<\/li>\n<li>Jayam and Co. v. Asstt. Commissioner and Anr. \u2014 2016 (15) SCC 125 \u2014 Referred [Para 5.1]<\/li>\n<li>Kartik Vijay Sonavane v. Deputy Commissioner Income Tax 2021 (11) TMI 682 (Guj) \u2014 Referred [Para 5.1]<\/li>\n<li>Kunj Behari Lal Butail v. State of H.P. \u2014 (2000) 3 scc 40 \u2014 Referred [Para 5.1]<\/li>\n<li>Lawrance Livingston v. Commercial Tax Officer \u2014 2019 SCC OnLine Mad 10993 \u2014 Referred [Para 5.1]<\/li>\n<li>Tarapore &amp; Co. v. State of Jharkhan \u2014 2029 SCC OnLine Jhar 1918 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2024)%2021%20Centax%20182%20(Gau)&amp;itemType=AP\">National Plasto Moulding v. State of Assam<\/a> \u2014 (2024) 21 Centax 182 (Gau) \u2014 Followed [Para 18]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2018%20(10)%20G.S.T.L.%20182%20(Del.)&amp;itemType=AP\">On Quest Merchandising India (P.) Ltd. v. Government of NCT of Delhi<\/a> \u2014 2018 (10) G.S.T.L. 182 (Del.) \u2014 Referred [Para 5.1]<\/li>\n<li>Petroleum and Natural Gas Regulatory Board v. Indraprastha Gas Limited \u2014 (2015) 9 SCC 570 \u2014 Referred [Para 5.1]<\/li>\n<li>R.S. Infra Trasmission Ltd., v. State of Rajasthan \u2014 2018 SCC OnLine Raj 3587 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2022%20(63)%20G.S.T.L.%20413%20(Cal.)&amp;itemType=AP\">Sanchita Kundu v. Asstt. Commissioner of State Tax<\/a> \u2014 2022 (63) G.S.T.L. 413 (Cal.) \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2019%20(29)%20G.S.T.L.%20225%20(Guj.)&amp;itemType=AP\">Shabnam Petrofils (P.) Ltd. v. Union of India<\/a> \u2014 2019 (29) G.S.T.L. 225 (Guj.) \u2014 Referred [Para 5.1]<\/li>\n<li>Shree Yarns v. Asstt. Commissioner \u2014 2017 SCC OnLine Mad 5730 \u2014 Referred [Para 5.1]<\/li>\n<li>Siddharth Enterprises v. Nodal Officer G.S.T.L. 664 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2020%20(38)%20G.S.T.L%20592%20(Del.)&amp;itemType=AP\">SKH Sheet Metal Component v. UOI<\/a> \u2014 2020 (38) G.S.T.L 592 (Del.) \u2014 Referred [Para 5.1]<\/li>\n<li>Sri vinayaga Agencies v. Asst. Commr. (CT) \u2014 2013 SCC OnLine Mad 323 \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2026)%2038%20Centax%20116%20(Tripura)&amp;itemType=AP\">Enterprises v. Union of India<\/a> \u2014 (2026) 38 Centax 116 (Tripura) = 2026 (105) G.S.T.L. 177 (Tripura) \u2014 Followed [Para 18]<\/li>\n<li>State of Madras v. Radio and Electricals Ltd., and Anr \u2014 1966 SCC OnLine SC 132 \u2014 Referred [Para 5.1]<\/li>\n<li>Union of India v. Adfert Technologies (P.) Ltd. \u2014 [2020] 115 taxmann.com 29 (SC) \u2014 Referred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2025)%2035%20Centax%20222%20(S.C.)&amp;itemType=AP\">Commissioner Trade and Tax Delhi v. Shanti Kiran India (P) Ltd.<\/a> \u2014 (2025) 35 Centax 222 (S.C.) \u2014 Referred [Para 5.1]<\/li>\n<li>Onyx Designs v. Asst. Commr. Of C.T. \u2014 2019 (67) GSTR 209 \u2014 Referred [Para 5.1]<\/li>\n<li>State of Karnataka v. Rajesh Jain \u2014 2016-VIL-701 KAR \u2014 Refferred [Para 5.1]<\/li>\n<li>Mukand Ltd. v. State of Karnataka \u2014 2018-VIL-82-KAR \u2014 Refferred [Para 5.1]<\/li>\n<li>Chunni Lal Parshadi Lal v. Commissioner of Sales Tax \u2014 (1986) 2 (SCC) 501 \u2014 Refferred [Para 5.1]<\/li>\n<li>Infiniti Wholesale Ltd. v. Assistant Commissioner \u2014 (2015) 82 VST 457 \u2014 Refferred [Para 5.1]<\/li>\n<li>Assistant Commissioner v. Infiniti Wholesale Ltd. \u2014 [2017] 99 VST 341 (Mad) \u2014 Refferred [Para 5.1]<\/li>\n<li>Commissioner v. Mahajan Steel and Allied Industries \u2014 2009 SCC OnLine P&amp;H 6941 \u2014 Refferred [Para 5.1]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2023)%204%20Centax%20373%20(Cal.)&amp;itemType=AP\">LGW Industries v. Union of India<\/a> \u2014 (2023) 4 Centax 373 (Cal.) \u2014 Refferred [Para 5.1]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Instakart Services Pvt. Ltd. vs. Union of India (2026) 42&hellip;<\/p>\n","protected":false},"author":19,"featured_media":8991,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,62,189],"tags":[],"class_list":["post-8984","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-statutory-scope"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>HC Reads Down Section 16(2)(c) to Protect Bona Fide ITC Claims<\/title>\n<meta name=\"description\" content=\"HC rules bona fide buyers cannot lose ITC due to supplier default; Sec 16(2)(c) and Rule 36(4) read down under GST law.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.centaxonline.com\/blog\/hc-reads-down-section-162c-to-protect-bona-fide-itc-claims\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"HC Reads Down Section 16(2)(c) to Protect Bona Fide ITC Claims\" \/>\n<meta property=\"og:description\" content=\"HC rules bona fide buyers cannot lose ITC due to supplier default; 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