--- title: "Prime Metals vs Central Board of Indirect Taxes and Customs & Others, (SLP) (C) No. 18577 of 2026 29th May, 2026" date: 2026-07-06 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/section-162c-cgst-act-itc-denial/ --- # Prime Metals vs Central Board of Indirect Taxes and Customs & Others, (SLP) (C) No. 18577 of 2026 29th May, 2026 Posted On - 6 July, 2026 • By - King Stubb & Kasiva The Supreme Court declined to interfere with the High Court’s order dismissing the writ petition on the ground of availability of an alternate statutory remedy. However, the Court granted the assessee liberty to pursue a statutory appeal and kept open all substantive legal questions. ## Supreme Court’s Order and Conditions While upholding the High Court’s procedural decision, the Supreme Court imposed the following conditions: - The assessee was granted **liberty to file a statutory appeal within eight weeks**. - The appeal is subject to making the prescribed pre-deposit. - All legal and constitutional issues were kept open, including the challenge to the *validity and interpretation* of Section 16(2)(c) of the CGST Act. ## The Underlying Dispute: ITC Denial Due to Supplier Default The dispute concerned the **denial of Input Tax Credit (ITC)** to a purchaser on the ground that the supplier had failed to deposit the tax collected from the purchaser with the Government. While refraining from deciding the merits, the Supreme Court ensured that the assessee’s substantive rights remained protected. It left open for future judicial determination the larger and recurring question in GST law. The core question is whether a *bona fide purchaser* can be denied ITC solely because of the supplier’s default in remitting tax to the Government, even when the purchaser has: - Received goods or services - Paid consideration along with GST - Otherwise complied with all statutory requirements *Last Updated on 6 July, 2026* --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)