Sikkim High Court Allows Refund of Unutilized Input Tax Credit (ITC) Upon Closure of Business

The Sikkim High Court ruled that a registered assessee is entitled to claim a refund of unutilized Input Tax Credit (ITC) upon closure of business under Section 54(1) of the CGST Act.

The Court emphasized that the right to claim ITC is a substantive right and cannot be denied merely because there is no specific provision for a refund on business closure.

The case involved a taxpayer whose refund claim was denied despite surrendering registration.

The Court directed the tax department to process the refund claim, affirming that denial would amount to unjust enrichment by the state.