S. 73 Proceedings on GST ITC Availment on Payment Under Dispute in Appeal: Allahabad HC Finds Matter Worth Consideration, Grants Interim Relief

The Allahabad High Court has granted interim relief to a taxpayer in a case involving the availment of Input Tax Credit (ITC) on a payment that was itself under dispute in a separate appeal. The GST department had initiated proceedings under Section 73 to demand the reversal of ITC. The taxpayer argued that these proceedings were premature, as the very liability to make the underlying payment (on which ITC was claimed) was being contested in an appeal. The High Court found that this argument was worth consideration and that the matter required a detailed hearing. In the meantime, to protect the taxpayer's interests, the court granted an interim stay on the proceedings, preventing the department from taking any final action until the legal issue is decided.