--- title: "Bhandari Scrap Traders v Union of India, 2026 LiveLaw (SC) 725, 24 July 2026" date: 2026-08-03 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/section-162c-cgst-act/ --- # Bhandari Scrap Traders v Union of India, 2026 LiveLaw (SC) 725, 24 July 2026 Posted On - 3 August, 2026 • By - King Stubb & Kasiva The Supreme Court dismissed the Special Leave Petitions against the Gujarat High Court’s judgment upholding the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017. The petitioners contended that a bona fide purchasing dealer should not be denied Input Tax Credit (ITC) solely because the supplier failed to deposit the tax collected from the purchaser. The Court observed that although similar issues arising from the Tripura High Court’s decision in *Sahil Enterprises* were pending before it, the Gujarat High Court had undertaken a more comprehensive analysis of the statutory framework governing ITC under the GST regime.  The Supreme Court agreed with the Gujarat High Court that the Delhi Value Added Tax Act, 2004 and the CGST Act operate under fundamentally different statutory schemes, making it inappropriate to apply precedents under the Delhi VAT Act to GST cases. It further noted that Sections 41, 73, and 74 of the CGST Act provide a statutory framework under which a purchasing dealer may re-avail reversed ITC, subject to the prescribed conditions, once the supplier discharges the outstanding tax liability. Holding that there was no basis to declare Section 16(2)(c) unconstitutional, the Court affirmed the Gujarat High Court’s judgment, dismissed the Special Leave Petitions, and disposed of the pending applications.  *Last Updated on 3 August, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## 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/)