Authority: Supreme Court of India
Order Date: 27-07-2026
Case Overview
- Petition for Special Leave to Appeal (C) No. 23931/2026 filed by Bhandari Scrap Traders against Union of India & others, arising from the impugned final judgment and order dated 01-05-2026 of the Gujarat High Court in SCA No. 749/2025.
- The petition challenged the Gujarat High Court’s interpretation of GST law, specifically the applicability of Section 16(2)(c) of the CGST Act and the treatment of Input Tax Credit (ITC) when the supplier‑dealer fails to pay tax.
- The Court also noted a related SLP (C) No. 24088/2026 concerning a decision of the Tripura High Court in Sahil Enterprises vs. Union of India & Ors., but found that the Tripura judgment was not relevant to the present matter.
- Detailed analysis in the Gujarat judgment compared provisions of the Delhi Value Added Tax Act, 2004 with the Central Goods and Services Tax Act, 2017, concluding that parity between a purchasing dealer under the CGST Act and a bonafide purchasing dealer under the Delhi VAT Act could not be drawn when the supplier‑dealer fails to discharge tax liability.
- The Gujarat High Court referred to Sections 41, 73 and 74 of the CGST Act, stating that a purchasing dealer is entitled to re‑avail reversed ITC after the supplier‑dealer clears the tax liability.
- The Supreme Court agreed with this reasoning, holding that no grounds exist to declare Section 16(2)(c) of the CGST Act unconstitutional or to read down its provisions.
Final Outcome
- The Supreme Court affirmed the Gujarat High Court’s judgment and dismissed the special leave petitions filed by Bhandari Scrap Traders.
- All pending applications, if any, were ordered to stand disposed of.
Topics: GST, Tax Law, Supreme Court Decision