Section 16 of the CGST Act, 2017 – Input Tax Credit –- The intra Court appeal is filed against the order dated 13.12.2021, whereby the court hold that input tax credit will be denied only where the purchasers are proved to be collusive and in the nature of sham transaction. The counsel for the appellant submitted that the writ petition itself was premature and certain other writ petitions were pending where constitutional validity of the said provision namely Section 16(2) (c) has been challenged. The court observed that the directions issued by the learned Single Judge were not only in the interest of the respondents/writ petitioners, but also would safeguard the interest of the revenue. Further the actual adjudication of the dispute has not taken place which is required to be done before an order is passed either accepting or denying the input tax credit. Therefore, no interference is called for to the direction issued by the learned Single Judge.

Held that:- The Hon’ble High Court set aside both the appeals with a direction to the respondents to submit one more set of documents which they sought to rely upon to the concerned appellant authority within a period of two weeks and on receipt of these documents, the concerned authority shall proceed to act on merits and in accordance with law.