Allahabad HC Declines to Interfere in 100% ITC Penalty Dispute, Allows Rectification Application to be Decided within Fixed Timeline [Read Order]
The Bench directed the authorities to decide the pending rectification application after providing the petitioner with a due opportunity of hearing in accordance with law.
gst - itc - taxscan
gst - itc - taxscan
The Allahabad High Court declined to exercise its extraordinary jurisdiction under Article 226 of the Constitution in a dispute concerning a 100% penalty imposed on disallowed Input Tax Credit (ITC) under the Goods and Services Tax ( GST ) Act, 2017.
The petitioner, Kartik Enterprises, had challenged a penalty order passed under Section 22 of the Act for the financial year 2020-21, contending that the penalty imposed equivalent to 100% of the disputed ITC was excessive.
While noting that the petitioner had not filed an appeal against the order, the Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla observed that an alternative statutory remedy by way of rectification under Section 161 of the Act was already availed.
It was submitted that the petitioner’s rectification application, filed on April 2, 2025, remained pending before the competent authority. Considering this, the Court held that no interference under writ jurisdiction was warranted at this stage.
The Bench directed the authorities to decide the pending rectification application on or before November 30, 2025, after providing the petitioner with a due opportunity of hearing in accordance with law.
Accordingly, the writ petition was disposed of, granting liberty to the petitioner to pursue the statutory remedies available under the Act.
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