Title: Hindustan Unilever Limited vs. Union of India
Date of Decision: September 6, 2023
Case ID: D.B. Civil Writ Petition No. 13617/2023
Presiding Judges: Hon’ble Mr. Justice Manindra Mohan Shrivastava and Hon’ble Mr. Justice Praveer Bhatnagar
Intro:
In D.B. Civil Writ Petition No. 13617/2023 before the High Court of Judicature for Rajasthan at Jaipur, Hindustan Unilever Limited (the petitioner) challenged the absence of a proper mechanism for matching credit notes issued by suppliers with the Input Tax Credit (ITC) reversal by the recipient, under the Goods and Services Tax (GST) law in India.
Facts:
The petitioner, Hindustan Unilever Limited, raised concerns regarding the absence of a robust mechanism for matching credit notes issued by suppliers with the ITC reversal by the recipient under the GST law. Previously, Section 43 of the Central Goods and Services Tax Act (CGST Act) and Rajasthan Goods and Services Tax Act (RGST Act) mandated the department to undertake the matching exercise for such transactions. However, this provision was later omitted.
The petitioner argued that it is practically challenging to obtain certificates from recipients as proof of ITC reversal, which is necessary for claiming a reduction in tax liability. They contended that the burden of proof should rest with the department rather than the supplier, as it is difficult to collect certificates or evidence of ITC reversal from the recipients. While the petitioner claimed to have managed to obtain such certificates in some cases, they argued that the current requirement is burdensome and unworkable.
Judgment:
The High Court noted that the petitioner’s challenge was primarily based on the practical difficulties faced in collecting certificates or evidence of ITC reversal from recipients. However, as per the existing legal framework, the burden of providing proof of ITC reversal rested with the supplier.
The Court found that the matter needed further consideration, particularly regarding the workability of the provision. Therefore, it directed the learned counsel for the Union of India to present an appropriate suggested mechanism for addressing the issues raised by the petitioner.
No interim orders were granted at this stage, and the Court scheduled the next hearing for October 5, 2023. The matter was left for further judicial deliberation to determine an effective mechanism for matching credit notes under the GST law.
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Written by Yagya Agarwal
