The Sikkim High Court has ruled that businesses are entitled to refunds of unutilised Input Tax Credit (ITC) even after they cease operations. The case arose from a writ petition by SICPA India Pvt Ltd, which had halted manufacturing in Sikkim and sought a refund of around ₹4.4 crore in accumulated ITC. The Court held that shutting down operations does not extinguish a company’s right to claim refunds under GST laws. This landmark judgment strengthens a taxpayer’s rights by clarifying that business closure does not bar recovery of eligible credit.

This ruling sets a significant precedent, reaffirming that under Section 54 of the CGST Act, a registered person can claim ITC refunds regardless of operational status, provided the underlying conditions are satisfied.

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