Shri. Mahalinga Patali vs. The Commissioner Of Central Excise
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Before: SHRI. MAHALINGA PATALI
IMPUGNED BEING THE ORDER-IN-APPEAL NO.MNG-JJ-ADC-14-2023-24- GST DATED 22.06.2023 AT ANNEXURE A TO THE WRIT PETITION, PASSED BY THE RESPONDENT NO.3 AND ETC.,
THIS WRIT PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR NC: 2025:KHC:15710 ORAL ORDER
In this petition, petitioner seeks the following reliefs: "Wherefore, it is respectfully prayed that this Hon'ble Court may be pleased to: (a) Issue a writ of Certiorari, Similar Writ, Order of Direction in the nature of a Writ or such appropriate Writ, and quash the Order Impugned being the Order-in-Appeal No.: MNG-JJ-ADC-14-2023-24-GST dated 22.06.2023 at ANNEXURE A to the Writ Petition, passed by the Respondent No. 3; (b) Issue a writ of Certiorari, Similar Writ, Order of Direction in the nature of a Writ or such appropriate Writ and quash the Order of Adjudication dated 23.11.2023 at ANNEXURE B to the Writ Petition, issued by the Respondent No. 4. (c) Declare that the denial of input credit to the Petitioner solely on the basis of the mere procedural and technical restriction on taking input tax credit that is set out in section 16(4) of the Central Goods and Services Tax Act, 2017 and Karnataka Goods and Services Tax Act, 2017 is unconstitutional unlawful, and arbitrary more so where the overriding and substantive provisions in sections 16(1) and (2) of the Central Goods and Services Tax Act, 2017 and Karnataka Goods and Services Tax Act, 2017 have admittedly been fulfilled by the Petitioner (ANNEXURE-H). (d) Declare that the retrospective amendment to Rule 61(5) of the Central Goods and Services Tax Rules 2017 (ANNEXURE-J), by way of Notification No.49/2019- NC: 2025:KHC:15710 CT is unconstitutional and ultra vires the Central Goods and Services Tax Act 2017, and declaring that, on the contrary the said amendment shall apply only for tax periods commencing after the date of the amending notification i.e., 09.10.2019 and not for tax periods commencing before the said date; (e) Declare that the retrospective amendment to Rule 61(5) of the Karnataka Goods and Services Tax Rules 2017 (ANNEXURE-L), by way of Notification (4- F/2019) No. FD47CSL2017 is unconstitutional and ultra vires the Karnataka Goods and Services Tax Act 2017, and declaring that, on the contrary the said amendment shall apply only for tax periods commencing after the date of the amending notification Le.. 30.10.2019 and not for tax periods commencing before the said date; (f) Declare that Notification No. 49/2019-CT dated 09.10.2019 (ANNEXURE-K) to the extent that it retrospectively amends Rule 61(5) of the Central Goods and Services Rules, 2017 is illegal and ultra vires the Central Goods and Services Act, 2017; (g) Declare that Notification (4-F/2019) No. FD47CSL2017 dated 30.10.2019 (ANNEXURE-M) to the extent that it retrospectively amends Rule 61(5) of the Karnataka Goods and Services Rules, 2017 is illegal and ultra vires the Karnataka Goods and Services Act, 2017;
[ Without prejudice to the above and in any event, (h) Condone the delay in filing the monthly return in Form GSTR-3B for the tax period March 2018 with reference to the last date that is said to be set out in terms NC: 2025:KHC:15710 of Section 16(4) of the Central Goods and Services Tax Act, 2017 and Karnataka Goods and Services Tax Act, 2017 and thereby permitting the Petitioner to avail and utilize the Input Tax Credit of the tax admittedly paid to the vendors; (i) Pass an Order as the costs of the present Writ Petition; and (j) Pass such other Order or Orders as this Hon'ble Court may deem fit and proper in the circumstances of the case, in the interests of justice."
Heard learned counsel for the petitioner, learned counsel for respondent Nos.1 to 3, 5, 7 and 8, learned AGA for respondent No.4 and learned counsel for respondent No.6 and perused the material on record.
A perusal of the material on record would indicate that respondent Nos.1 to 3 and respondent Nos.5 to 8 instituted proceedings against the petitioner under Section 73(1) of CGST Act by issuance of show cause notice dated 05.09.2020 by respondent No.2, which culminated in the order-in-Original vide Annexure-D dated 05.07.2021 and confirmed by the First Appellate Authority in the order-in-Appeal vide Annexure-A dated 22.06.2023. 4. It is submitted that the issue in relation to the aforesaid impugned order-in-Original and the order-in-Appeal are directly and NC: 2025:KHC:15710 squarely covered by the judgment of this Court in the case of M/s respondent No.4 - Karnataka State GST Authorities issued impugned show cause notice at Annexure-F dated 29.09.2023 in relation to the very same financial year 2017-18 and in respect of the very same subject matter, which is clearly barred under Section 6(2)(b) of the CGST/KGST Act and consequently, the impugned show cause notice as well as the impugned adjudication order vide Annexure-B dated 23.11.2023 in respect of the same issue and the same period deserves to be quashed as being contrary to Section 6(2)(b) of CGST Act.
Per contra, learned AGA as well as learned counsel for the remaining respondents do not dispute that the issue in relation to the proceedings initiated by the Central GST Authorities is directly and squarely covered by the judgment of this Court in M/s Sadhana Enviro Engineering Services (supra), and the present NC: 2025:KHC:15710 petition may be disposed off accordingly. So also, learned AGA for respondent No.4 also does not dispute that it is only after passing of the impugned order by the Central GST Authorities that the State GST Authorities issued the impugned show cause notice at Annexure-F and passed the impugned order at Annexure-B, which is barred under Section 6(2)(b) of the CGST Act.
In view of the aforesaid facts and circumstances, I deem it just and appropriate to set aside Annexures-A and B and dispose off the petition in terms of M/s Sadhana Enviro Engineering Services (supra).
In the result, I pass the following:- ORDER (i) The petition insofar it relates to challenge to Annexures-A and B are concerned is allowed and disposed off in terms of M/s Sadhana Enviro Engineering Services (supra).
(ii) The impugned order-in-Original and the impugned order-in-Appeal are set aside and the parties are relegated to the stage of show cause notice at Annexure-C dated 05.09.2020 issued by the NC: 2025:KHC:15710 respondent(s) and the respondents are directed to give effect to and implement the amended provisions contained in Section 118 of “The Finance (No.2) Act, 2024” relating to insertion of Section 16(5) to the CGST Act / KGST Act by providing sufficient and reasonable opportunity and hear the petitioner and proceed further in accordance with law within a period of one month from the date of receipt of a copy of this order.
(iii) The impugned show cause notices vide Annexures-B and F dated 05.09.2020 and 29.09.2023 respectively are hereby quashed.
(iv) The respondents are directed to unblock and release the credit balance of the petitioner in their ITC Ledger / Account, if not already released, immediately / forthwith upon receipt of a copy of this order without any delay.
(v) All rival contentions on all other prayers sought for by the petitioner including the challenge to the statutory NC: 2025:KHC:15710 provisions are kept open and no opinion is expressed on the same. (S.R.KRISHNA KUMAR) JUDGE
*bgn/- CT:VS List No.: 1 Sl No.: 35
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