HIGH COURT OF TRIPURA

AGARTALA

WP(C) No.6 88 of 2022

M/S. Sahil Enterprises, Khaitan Ni.3483, Ward No.9, Khayerpur Mouja, Assam Agartala Road, Agartala, West Tripura-799008, GSTIN:

16PFPS9527H1ZF. ……… Petitioner(s).

V E R S U S

1. Union of India, through its Secretary, Government of India, Ministry of

Finance, Department of Revenue, North Block, New Delhi.

2. Commissioner, Central Goods & Services Tax, Tripura Division-I, Jackson

Gate Building, 3^rd Floor, Lenin Sarani, Agartala, Tripura-799001.

3. Assistant Commissioner, Tripura Division-I, Jackson Gate Building, 3^rd

Floor, Lenin Sarani, Agartala, Tripura-799001.

4. M/S. Sentu Dey, Represented by its Proprietor Sri Sentu Dey, Bairagi

Bazar, Jumerdhepha Melaghar, Sepahijala, Tripura Pin-799115.

………Respondent(s).

For Petitioner(s) : Mr. Naveen Bindal, Advocate,

Mr. Mukul Singla, Advocate,

Mr. Prabal Kumar Ghosh, Advocate.

For Respondent(s) : Mr. Bidyut Majumder, Deputy S.G.I.,

Mr. Bibhal Nandi Majumder, Sr. Advocate,

Mr. Biplabendu Roy, Advocate,

Mr. Elembrok Debbarma, Advocate.

HON’BLE THE CHIEF JUSTICE MR. M.S. RAMACHANDRA RAO

HON’BLE MR. JUSTICE S. DATTA PURKAYASTHA

CAV reserved on : 27.11.2025 Judgment delivered on : 06.01.2026

Whether fit for reporting : YES

JUDGMENT & ORDER

(M.S. Ramachandra Rao, C.J.)

1) The challenge in this Writ Petition is primarily to the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act,2017 ( for short ‘the Act’). In addition, petitioner has also sought for quashing of an order dt.17.5.2022 issued by the Assistant Commissioner,

Central Goods and Services Tax, Tripura Division-I, Agartala (Respondent no.3) confirming a demand of Rs.1,11,60,830/- along with interest and penalty under section 73 of the said Act.

The factual background to the filing of the Writ Petition:

2) The petitioner, a proprietary concern engaged in trading of rubber products, had purchased different products from M/s Sentu Dey (for short “supplier/ Respondent no.4”) on due payment of Goods and Services Tax ( for short ‘GST’) and further sold them as such. These transactions took place between July,2017 to January,2019 involving GST of Rs.1,11,60,830/- which it had paid to its vendor/supplier.

3) On an investigation by officers of the Enforcement Branch of the CGST Commissionerate, Agartala of the supplier Company, it was discovered that the respondent no.4 was supplying rubber products to different traders, but was not depositing the GST paid by the purchasers to it including the petitioner with the Government. Respondent no.4 had filed Form GSTR-01 return under section 37 of the Act showing the sale of goods to the petitioner, but failed to deposit the tax collected from petitioner while filing GSTR-3B under section 39 of the Act. It had filed ‘Nil’ GSTR-3B returns.

4) The respondent No.3 opined that as Respondent no.4 did not deposit the GST with the Government, petitioner is not eligible to avail Input Tax Credit (for short 'ITC') of the same amount to discharge it’s output tax liability even though petitioner had already paid the GST amount to Respondent no.4. The respondent nos.1 to 3 blocked the whole ITC balance as on 8.2.2021 amounting to Rs.7,32,353/- from the Electronic Credit Ledger of the petitioner.

5) When petitioner sent an email dt.15.5.2020 enquiring about the blocking of the ITC in its Electronic Credit ledger, the respondent No.3, by letter dt.21.5.2020 informed petitioner that Respondent no.4 had not discharged its tax liabilities to the Government, and as petitioner had made purchases from Respondent no.4, it is not entitled to ITC of the tax paid by it to Respondent no.4.

6) Later on 7.1.2021, the respondent issued a Demand–cum-Show cause notice to petitioner invoking Section 73 of the Act asking petitioner to show cause why Rs.1,11,60,830/- wrongly availed by petitioner as ITC should not be reversed along with interest and penalty.

7) Petitioner submitted reply on 8.2.2021 stating that it could only verify the details of outward supplies reflected in GSTR-