Satyam Ispat (North East) Limited vs. The Union Of INDIA And 5 Ors.
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The petitioner, Satyam Ispat (North East) Limited, challenged the vires of Section 16(4) of the GST Act, 2017, and an Order-in-Original dated March 31, 2022. This order, passed by the Assistant Commissioner, CGST & CX, Itanagar Division, demanded Input Tax Credit (ITC) of IGST, CGST, and SGST amounting to Rs. 4,85,43,858/- irregularly availed and utilized for the tax period from March 2018. The demand included interest at 24% and a penalty of Rs. 48,54,386/-. The challenge was brought before the Gauhati High Court.
Held
The Court noted that during the pendency of the writ petition, Section 16 of the Central Goods and Services Tax Act, 2017, was amended with retrospective effect from July 1, 2017, by inserting Sub-Section (5). This new sub-section provides that for invoices or debit notes pertaining to Financial Years 2017-18, 2019-20, and 2020-21, a registered person is entitled to take input tax credit in any return filed up to November 30, 2021. Both parties agreed that this amendment addressed the petitioner's grievances. Consequently, the Court set aside the impugned Order-in-Original dated March 31, 2022, without adjudicating it on merits. The respondent authorities were directed to pass an appropriate order considering the provisions of the newly inserted Sub-Section (5) of Section 16 of the CGST Act, 2017, as per the Amendment (Finance Act, 2024) dated August 16, 2024. The writ petition was disposed of accordingly.
Key Issues
1. Whether Section 16(4) of the Central Goods and Services Tax Act, 2017, as it stood prior to the amendment, is ultra vires the Constitution, and consequently, whether the Order-in-Original dated March 31, 2022, is liable to be set aside? Petitioner's contention: The petitioner argued that Section 16(4) of the CGST Act, 2017, was arbitrary and sought to set aside the impugned order. Revenue's contention: The respondents agreed that the grievances raised by the petitioner have been redressed due to a subsequent amendment to Section 16 of the CGST Act, 2017.
Sections Cited
Section 16(4), Section 73(9), Section 20, Section 50(3), Section 16(5)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER Date : 16.09.2024 (Kardak Ete, J) Heard Dr. A. Saraf, learned Senior Advocate assisted by Ms. T. Y. Bhutia, learned counsel for the petitioner. Also heard Mr. M. Kato, learned DSGI appearing for the respondent No.1 and Mr. M. K. Boro, learned Standing Counsel, CGST & CX/respondent Nos. 2, 3 & 4. 2. By filing this writ petition, the petitioner has put to challenge the vires of Section 16(4) of the GST Act, 2017 and the Order-in-Original dated 31.03.2022, passed by the Assistant Commissioner, CGST & CX, Itanagar Division/respondent No. 4, whereby, the petitioner is directed to pay to the demand of Input Tax Credit of IGST, CGST and SGST amounting to Rs. 4,85,43,858/- availed and utilized irregularly during the period for the tax from March, 2018 and March, 2018, in terms of Sub-Section (9) of Section 73 of the CGST Act, 2017, read with Section 20 of the IGST, 2017, with interest at applicable rate i.e. 24% under Section 50(3) of the CGST Act, 2017 for a period from due date of payment to date of actual payment, with penalty amounting to Rs. 48,54,386/- which is equivalent to 10% of the tax due under Sub-Section (9) of Section 73 of the CGST Act, 2017 read with Section 20 of the IGST Act, 2017. Page No.# 4/5
During the pendency of the writ petition, vide Gazette Notification dated 16.08.2024, an amendment of Section 16 of the Central Goods and Services Tax has been made with retrospective effect from 01.07.2017 by inserting Sub- Section (5) in Section 16 of the Central Goods and Services Tax Act, 2017. 4. Section 16(5) of the Central Goods and Services Tax Act, 2017 reads as under:
“(5) Notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial Years 2017-18, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under Section 39 which is filed up to the thirtieth day of November, 2021.”
The learned counsels appearing for the respondents are in agreement that in view of the insertion of Sub-Section (5) in Section 16 of the Central Goods and Services Tax Act, 2017, the grievances raised by the petitioner has been redressed.
Dr. A. Saraf, learned Senior Advocate for the petitioner, submits that in view of the amendment brought in Section 16 of the Central Goods and Services Tax Act, 2017 by inserting Sub-Section (5), the impugned Order-in-Original dated 31.03.2022, passed by the respondent authorities may be set aside and matter be remanded back and direction may be issued to pass an appropriate
Page No.# 5/5 order in view of insertion of Sub-Section (5) of Section 16 of Central Good and Services Tax Act, 2017. 7. In view of the submissions made by the learned counsels for the parties and also considering the amendment of Section 16 of the Central Goods and Services Tax Act, 2017, by inserting Sub-Section (5) in Section 16 of the said Act, the impugned order in original dated 31.03.2022, is hereby set aside without adjudicating the said orders on merit.
The respondent authorities are directed to consider and pass an appropriate order taking into consideration of the provision of Sub-Section (5) of Section 16 of the Central Goods and Services Tax Act, 2017, vide Amendment (Finance Act, 2024) dated 16.08.2024. 9. This writ petition stands disposed of, in terms of the above observation and direction. JUDGE JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.