Jigar Parikh

[Arpit Haldia @haldiaarpit]

Beyond Validity: Judgement in Maruti Enterprise and Bhandari Scrap Traders Shaping Future GST Disputes

1️⃣ The discussion around Section 16(2)(c) has largely been reduced to one headline: that its constitutional validity stands upheld in Maruti Enterprise v. Union of India, [2026] 186 https://t.co/bQAFqN4YOZ 90 (Guj.) [01-05-2026], and thereafter affirmed in Bhandari Scrap Traders v. Union of India, [2026] 188 https://t.co/bQAFqN4YOZ 986 (SC) [24-07-2026].

But, if one leaves aside the constitutional validity aspect, there is much to ponder upon.

2️⃣ Absence of action against the erring supplier

The reference to Sections 73 and 74 in Paragraph 3 in Bhandari Scrap (supra) is directly traceable to paragraphs 62 and 64 of Maruti Enterprise (supra), where the court proceeded on the basis that the Revenue would ideally act against the defaulting supplier and recover the unpaid tax. Since a purchaser cannot invoke Sections 73/74, compel tax payment or enforce supplier compliance, the reliance placed on these provisions as safeguards in Maruti Enterprise and Bhandari Scrap Traders necessarily presupposes Revenue-side action against the supplier. This principle is not new and finds recognition in D.Y. Beathel Enterprises (Mad.), R.T. Infotech (All.), R.K. Transport & Constructions Ltd. (Jhar.), and M/s Mahalaxmi Cotton Ginning, Pressing and Oil Industries (Bom.).

3️⃣ Absence of verification mechanism

The reference to Section 41 in Bhandari Scrap Traders (Supra) is equally important. In paragraph 74 of Maruti Enterprise (Supra), it was observed:

“Instead, the recipient must verify this via GSTR-2B and temporarily reverse ITC in GSTR-3B Table 4(B)(2) if the supplier has not paid it.”

Paragraph 74 proceeds on the assumption that the recipient can verify supplier compliance through GSTR‑2B and thereafter avail the reversal/re‑availment mechanism under Section 41. However, for earlier periods, neither the GSTR‑2B framework nor the substituted Section 41 regime (w.e.f. 01.10.2022) existed. Consequently, the very statutory framework underlying the reasoning in Maruti Enterprise and noticed in Bhandari Scrap Traders was unavailable for such periods, making a mechanical application of their conclusions legally debatable.

4️⃣ Genuine and Defaulting Taxpayer

In paragraphs 87 to 89 of Maruti Enterprise (Supra), the Court itself acknowledged the hardship faced by bona fide purchasers, emphasized the need for a technology-driven verification mechanism.

4️⃣ Conclusion

Maruti Enterprise (supra) and Bhandari Scrap Traders (supra) do not merely uphold Section 16(2)(c); they uphold it within a framework of action against the defaulting supplier, recipient having meaningful verification mechanism, and bona fide purchasers not left remediless. If those safeguards are absent, the denial of ITC cannot automatically follow. The real post-Bhandari Scrap Traders (supra) debate, therefore, may not be about constitutional validity at all, but about implementation.

[Jigar Parikh @Jigar_685]

@FinMinIndia @Infosys_GSTN @cbic_india #GSTAT

[Jigar Parikh @Jigar_685]

@FinMinIndia @Infosys_GSTN @cbic_india not able to lodge even the complaint for GSTAT related aspect. what is expected from the trade and professional?

[Jigar Parikh @Jigar_685]

@Jennnyyyyyy It's 18kg for the lion

[CA Chirag Chauhan @CAChirag]

GST portal is down!

Request due date ext @Infosys_GSTN @GST_Council @nsitharamanoffc

RT if agree

[CA Ruchita Vaghani @R_N_Vaghani]

Dear @Infosys_GSTN

GST Portal is not Working Properly Since Today Morning, Users are Facing Following Issue
➡️Difficulty in Login on Portal
➡️Captcha is not Loading
➡️Again and Again Logout From Portal
➡️Problem in saving GSTR-3B
➡️Payment and Proceed to file are working only after 6-7 attempts

Kindly solve this problems as soon as possible.

@cbic_india As users are unable to file GSTR-3B , Kindly Extend the due date. Why taxpayers suffers the inability of tech company. @nsitharamanoffc @nsitharaman @FinMinIndia

[Jigar Parikh @Jigar_685]

@cbic_india @Infosys_GSTN this surprising tech glitch has enabled hardly few who are able to either login or if they are getting success in login, getting OTP is a tough task.. please do needful and don't punish genuine tax payers who are willing to comply but failed to do so!

[Jigar Parikh @Jigar_685]

@abhishekrajaram In a situation where 1% is not paid by cash but entire tax paid through ITC, can department demand 1% tax through debit to cash ledger again?

[Jigar Parikh @Jigar_685]

@haldiaarpit @CAMihirModi By NN 40/2017 or 41/2017; 0.1% would go as merchant export transactions.. I remember SEZ is meant for manufacturing and not pure trading.. if this is correct, can supplier really supply at 0.1% to SEZ?

[Jigar Parikh @Jigar_685]

@haldiaarpit It is one such provision that might be struck down after couple of years and for these mid years,tax payers will end up in useless exercise of defending their matter which otherwise has no case at all, but for revenue,procedural breach are focus point than the ease of business!

[Jigar Parikh @Jigar_685]

@RockWithboAt kindly please share policies of paid repairing post warranty with your service centres. Over the customer care call, we are informed this is live now!! however the authorised centre in Vadodara is not aware! Please resolve..

[Jigar Parikh @Jigar_685]

@cbic_india The entire day the site was under maintenance!! Extending just GSTR 1 is not a thoughtful decision, it was due on 11th. Whereas GSTR 7 has sie date on 10th itself for which no portal was at all available!! Do consider this extension as well!

[Jigar Parikh @Jigar_685]

@cbic_india The entire day the site was under maintenance!! Extending just GSTR 1 is not a thoughtful decision, it was due on 11th. Whereas GSTR 7 has sie date on 10th itself for which no portal was at all available!! Do consider this extension as well!

[Arpit Haldia @haldiaarpit]

Denial of Waiver of Late Fees by way of FAQ in Circular No. 238 Dt 15-10-2024 for an order passed under Section 73 is illegal

At the outset, Section 73 cannot be used for recovery of Late Fees but if an order has been passed under Section 73 for recovery of late fees and if scheme provides that upon payment of tax specified in the notice, "all the proceedings in respect of the said notice or order or statement, as the case may be, shall be deemed to be concluded", then there cannot be any legal justification to deny benefit of Waiver scheme in GST.

If order is erroneous and limitation is still available, either appeal be filed under Section 107(2) or review be made under Section 108, but one cannot blankly deny the waiver by way of FAQ in Circular for an order passed under Section 73.

FAQ 12 of Circular No. 238 Dated 15-10-2024 goes beyond Section 128A to deny waiver scheme benefit in case of Late Fees. @cbic_india @GST_Council

[CA. Deep Koradia @DEEPKORADIA]

Dear @cbic_india , need to lookinto urgently.

@haldiaarpit Sir, pinching this since the day of amendment, no one is listing. I got gut feeling that Infy couldn't handle the refreshing of 8A figure every 2 months, so they just shifted it to 2B.

https://t.co/bJ84fAxEJr

[Jigar Parikh @Jigar_685]

@uppalca @haldiaarpit The ITC flowing from R1 will reflect in 2b generated on 14th of December.. ITC can be claimed only if visible in 2B! Hope this clarifies to your understanding!!

[Jigar Parikh @Jigar_685]

@missschandani hello

[Jigar Parikh @Jigar_685]

@ICICIBank_Care for fasttag it is more than 10 minutes and no response over call from customer care for fasttag!! @NHAI_Official

[Jigar Parikh @Jigar_685]

@cbic_india @Infosys_GSTN the portal as on date does not allow filing GSTR 9 for FY 23-24. not sure when will it be available!! Such delay in activation of utility at portal implies extension as well? Certainly @FinMinIndia will not! Requesting to execute! @theicai

[Jigar Parikh @Jigar_685]

@cricket_freak21 Jigar