Section 16(2)(c) Requiring Recipients to Ensure That Tax Has Actually Been Paid to the Government is Constitutionally Valid | HC

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Validity of Section 16(2)(c)

Case Details: Muhammed Abdul Saini v. State Tax Officer - [2025] 170 taxmann.com 252 (Kerala)

Judiciary and Counsel Details

  • Dr. A.K. Jayasankaran Nambiar & K.V. Jayakumar, JJ.
  • K. Krishna, Adv. for the Appellant.
  • Resmitha Ramachandran, GP for the Respondent.

Facts of the Case

The appellant had filed writ petition challenging the constitutional validity of Section 16(2)(c) which mandates that input tax credit (ITC) can only be availed by a recipient if supplier had paid corresponding output tax to government. The learned Single Judge rejected challenge and upheld validity of Section 16(2)(c) and the appellant filed appeal against the order.

High Court Held

The Honorable High Court noted that Section 16(2)(c) serves a legitimate purpose in ensuring effective functioning of the GST system and protecting government revenue. A Division Bench had already upheld validity of said section in case of Nahasshukoor v. Assistant Commissioner [2024] 123 GSTR 44 (KER), Therefore, the Court rejected the challenge to constitutionality of Section 16(2)(c) and dismissed the appeal.

List of Cases Reviewed

  • Nahasshukoor v. Assistant Commissioner II Circle, Alappuzha and Others [2024] 123 GSTR 44 KER (Para 2) followed

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Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied