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The Madras High Court set aside an order denying input tax credit (ITC) to M/s. Akal Trade Links and sent the dispute back for fresh consideration. The court’s reported reasoning was that the authority should examine whether the supply was genuine rather than treat missing lorry receipts and weighment slips as the end of the inquiry, given the other evidence on this record. The ruling did not finally allow the ITC claim.
What the Madras High Court decided
In M/s. Akal Trade Links v. Assistant Commissioner (ST), Kangeyam Assessment Circle, W.P. No. 20601 of 2023, the High Court set aside the assessment order dated 28 April 2023 and remanded the matter to the tax authority. The reported decision is dated 5 June 2026 and bears neutral citation 2026:MHC:2006. The case concerned assessment year 2018–19 and eight invoices issued between January and August 2018 for purchases from Eco-friendly Coco Products. LawText’s case record identifies Senthilkumar Ramamoorthy as the judge; TaxO’s summary also reports the outcome and directions.
The key point is procedural: the authority was required to reconsider the evidence and the genuineness of the supply. The court did not decide that Akal Trade Links was entitled to ITC.
Why the authority denied the credit—and what evidence was in dispute
The tax authority argued that, under Section 155 read with Section 16 of the Tamil Nadu Goods and Services Tax Act, 2017, the claimant had to establish entitlement to the credit. It relied on the absence of lorry receipts and weighment slips as evidence that the goods had actually moved.
Akal Trade Links’ reported position was that the supplier’s GST registration was in force when the purchases were made, the invoices recorded vehicle numbers, and the supplier reported the transactions in its returns and paid the tax. The petitioner also said the supplier arranged transportation. The case report says all eight invoices in the court record carried vehicle numbers.
On those facts, the court considered further examination of whether the supply was genuine warranted. The reported basis for setting aside the order was that the proposal had been confirmed merely because lorry receipts and weighment slips were missing, without adequate consideration of the other relevant circumstances. TaxGuru’s account corroborates the case identity and central issue, but its analysis should be distinguished from the court’s reported holding.
What the ruling does—and does not—establish
What it establishes on this record
- The authority had to examine the genuineness of the supply in light of the evidence relied on by the taxpayer, rather than treat the absence of two transport-related documents as a sufficient endpoint.
- The case was remanded for a fresh decision after the authority considered the record and any additional documents, with a reasonable opportunity for the taxpayer to be heard.
What it does not establish
- It is not a blanket rule that lorry receipts or weighment slips are unnecessary in every ITC dispute.
- Supplier registration, return filing, or payment of tax does not, by itself, establish a recipient’s entitlement to ITC.
- The court did not finally allow the credit or declare the underlying purchases genuine.
The case is fact-specific. When considering another ITC dispute, relevant distinctions include the evidence of actual supply and movement, the supplier’s status and reported tax payment during the relevant period, the authority’s stated reason for denial, and whether the decision addressed the full record. Those are practical comparison points, not a formal test announced by the court.
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What the remand directed
The High Court permitted Akal Trade Links to place additional documents before the authority within 15 days and directed the authority to pass a fresh order within three months after giving a reasonable opportunity of hearing. Those deadlines were directions in this case, not general filing or decision periods for other taxpayers. The writ petition was disposed of without costs, and the connected miscellaneous petitions were closed.
The available case summaries do not establish what the authority decided after remand or whether a later appeal followed. The disposition described here is the reported High Court order, not a statement of the dispute’s present procedural status.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What taxpayers can take from the case
For taxpayers facing an ITC challenge, the decision illustrates why the whole evidentiary record matters. A claimant remains responsible for establishing eligibility under the applicable law, but an authority’s assessment should address relevant evidence rather than rely mechanically on one missing category of documents.
In a dispute involving movement of goods, records that may help explain the transaction include invoices, available transport details, supplier communications, payment records, and documents supporting receipt or onward handling of the goods. Which evidence is relevant depends on the facts and applicable law; this judgment does not prescribe a universal checklist or guarantee that any particular document will prove entitlement.
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