The Hon’ble Rajasthan High Court (Jodhpur Bench) in M/s Shree Karni Electrovision v. Union of India & Ors. [D.B. Civil Writ Petition No. 4266/2023 dated August 17, 2026] dismissed the writ petition challenging the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) and the order passed under Section 74 of the CGST Act, and held that Section 16(2)(c) of the CGST Act is a mandatory condition requiring the tax charged in respect of the supply to be actually paid to the Government, and the initiation of insolvency proceedings against the supplier under the Insolvency and Bankruptcy Code, 2016 (“the IBC”) does not dispense with the said statutory condition. A purchaser who avails Input Tax Credit (“ITC”) without ascertaining whether the supplier has paid the tax does so at his own peril, and recovery of such ITC is permissible in accordance with law.
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