Bobieri Creazon Fashion Accessories (P.) Ltd. Vs State of Haryana And Another

The Punjab and Haryana High Court has temporarily stayed any coercive actions against Bobieri Creazon Fashion Accessories (P.) Ltd. as they challenge Section 16(2)(c) of the GST Act, 2017. The petitioner argues that this section unfairly places the burden of a supplier’s tax default onto buyers who have already paid their taxes. The ongoing legal challenge highlights concerns regarding the eligibility for ITC, as the burden to verify whether suppliers have remitted tax to the government rests on the recipient businesses. This creates practical difficulties and risks for businesses, especially SMEs, who may lose ITC due to factors outside their control. Tax authorities have also engaged in coercive measures against recipient businesses, further complicating the landscape. The court allowed the petitioner to amend their plea to include the Union of India as a respondent and has given time until the next hearing on March 6, 2025, for the State to file a response, while prohibiting any coercive actions against the petitioner in the interim.