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

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