M./S Girish Exports vs. The Assistant Commissioner Of Local - Karnataka High Court, 03 September 2024

Cause title — parties, addresses and appearances

- 1 - NC: 2024:KHC:36976 WP No. 105 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 105 OF 2024 (T-RES) BETWEEN: M./S GIRISH EXPORTS, A PARTNERSHIP FIRM, PLOT NO. 25/B, 2ND CROSS, SOMANAHALLY INDUSTRIAL AREA, MADDUR, MANDYA - 571 429. REPRESENTED BY ITS PARTNER SMT. P MEENA W/O SRI. C KUMAR, AGED ABOUT 47 YEARS, …PETITIONER (BY SRI. VANI H.,ADVOCATE) AND: 1. THE ASSISTANT COMMISSIONER OF LOCAL GOODS AND SERVICES TAX, LGSTO -210, CHIKKAMANDYAKERE, COMMERCIAL TAXES OFFICE, VIVEKANANDA NAGARA, NAGAMANGALA ROAD, MANDYA 571 402. 2. STATE OF KARNATAKA, DEPARTMENT OF FINANCE, REPRESENTED BY ITS SECRETARY, AMBEDKAR VEEDHI, VIDHANA SOUDHA, BANGALORE 560 001. 3. UNION OF INDIA, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI 110 001. (REPRESENTED BY ITS SECRETARY). 4. THE GOODS AND SERVICES TAX COUNCIL JANAPATH CONNAUGHT PLACE, NEW DELHI 110 001. (REPRESENTED BY ITS SPECIAL SECRETARY) …RESPONDENTS (BY SRI. HEMA KUMAR K ., AGA FOR R1 & R2; SRI. MADAN KUMAR PILLAI., CGC FOR R3; SRI. JEEVAN KUMAR NEERALGI., ADVOCATE FOR R4) Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:36976 WP No. 105 of 2024 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO I) TO DECLARE THE PROVISIONS OF SECTION 16(4) OF CENTRAL GOODS AND SERVICES TAX ACT, 2017 AS CONTRADICTING SECTION 16(2) OF THE SAID ACT ANDULTRA VIRES THE ARTICLES 14 AND 19(1)(g) OF THE CONSTITUTION, IN SO FAR AS PETITIONER IS CONCERNED AND II) QUASH THE IMPUGNED ORDER BERAING NO. ACCT-LGSTO-210/MDY/T NO. 1911/2023-24 DATED 26/09/2023 PASSED UNDER SECTION 73(9) OF THE KGST ACT BY THE FIRST RESPONDENT VIDE ANNEXURE-D AND ETC., THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING IN B GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner seeks for the following reliefs:-

“i) To Declare the provisions of Section 16(4) of Central Goods and Services Tax Act, 2017 as contradicting Section 16(2) of the said Act andultra vires the Articles 14 and 19(1)(G) of the Constitution, in so far as petitioner is concerned.

ii) Certiorari to Quash the impugned order bearing No. ACCT-LGSTO-210/MDY/TNo.1911/2023-24 dated 26/09/2023 passed under section 73(9) of the KGST Act by the first Respondent vide ANNEXURE-D.

iii) Certiorari to Quash the demand notice in Form GST DRC-07 summary order dated 27/09/2023 vide Reference No. ZD291923048287V issued under rule 100 of the KGST Rules by the first Respondent vide ANNEXURE-E.

iv) A writ of mandamus or a writ in the nature of mandamus directing the Respondents to allow input tax claimed by NC: 2024:KHC:36976 Petitioner vide GSTR-3B filed on 02/03/2022 for the tax period March 2020 as prayed for in the reply dated 02/03/2022 vide ANNEXURE-C.

v) Pass any other order or give any other direction as this Honourable Court deems fit and appropriate in the circumstances of the case.”

Heard learned counsel for the petitioner and learned counsel for the revenue and learned AGA for the State and perused the material on record.

A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in the case of M/s.Sadhana Commissioner of Central Tax & others – W.P.No.6138/2020 dated 03.09.2024, which reads as under:-

Heard learned Senior counsel for the petitioner and learned counsel for the respondents – revenue and learned AGA for the State and perused the material on record.

Learned Senior counsel for the petitioner submitted that though several contentions have been urged by the petitioner who has also sought for various reliefs, during the pendency of the present petition, a new provision i.e., Section 16(5) has been inserted by “The NC: 2024:KHC:36976 Finance (No.2) Act, 2024” vide Central Act 15 of 2024, in which, Clause No.118 provides for condonation of delay in availment of credit and extended the time limit by providing that for supplies pertaining to the financial years 2017-18, 2018-19, 2019-20 and 2020-21, the petitioner would be entitled to avail / claim credit in any return filed up to 30.11.2021. It is submitted that the said “The Finance (No.2) Act, 2024” received presidential asset on 16.08.2024 and would be notified shortly. It was further submitted that in cases where assessees had paid amounts as pre-deposit under court orders or in appeal proceedings or amounts recovered by the respondents – revenue are paid by the assessees pursuant to recovery proceedings, the embargo contained in Clause 150 of the said “The Finance (No.2) Act, 2024” would not apply and was not applicable to the assessees, who would not be covered by the said embargo and consequently, they would be entitled to refund of the said amounts. It is therefore submitted that without going into the various other contentions urged by the petitioner and reliefs sought for by it and without expressing any opinion on the same, the present petition may be disposed of with a direction to consider and implement and give effect to 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 within a stipulated time frame.

Per contra, learned counsel for the respondents – revenue and learned AGA for the respondents – State jointly and fairly submit that it is true that Section 16(5) was NC: 2024:KHC:36976 inserted vide Clause 118 of “The Finance (No.2) Act, 2024” and that the same was applicable to the petitioner and other assessees and the time for filing returns and availing input tax credit would stand extended upto 30.11.2021. It is also submitted that since presidential asset has already been received to “The Finance (No.2) Act, 2024”, necessary Notification would be issued shortly and as such, the present petition may be disposed of accordingly.

As rightly contended by the learned Senior counsel for the petitioner as well as learned counsel for the respondents – revenue and learned AGA for the State, Section 16(5) was inserted into the CGST Act vide Clause 118 of the “The Finance (No.2) Act, 2024”, which reads as under:- “118. In Section 16 of the Central Goods and Services Act, with effect from the 1st day of July, 2017, after sub-section(4), the following sub-sections shall be inserted, namely:- (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, 2018-19, 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. (6) xxxxxxxxxxxxx (i) xxxxxxxxxxxxxx (ii)xxxxxxxxxxxxxx ” NC: 2024:KHC:36976

In view of the aforesaid amendment by inserting Section 16(5) to the CGST / KGST Act, the present petition deserves to be disposed of relegating the parties to the original authority to implement and give effect to the said provisions after providing sufficient and reasonable opportunity to the petitioner and hearing them and proceed further in accordance with law and by issuing certain directions in this regard.

In the result, I pass the following:- ORDER (i) Petition is hereby disposed of. (ii) The parties are relegated to the stage of show cause notice at Annexure-C dated 13.02.2020 issued by the 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 blocking of the Input Tax Credit (ITC) ledger of the petitioner vide Annexure-F dated 03.02.2020 is 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. NC: 2024:KHC:36976 (v) All rival contentions on all other prayers sought for by the petitioner including the challenge to the statutory provisions are kept open and no opinion is expressed on the same.

In view of the aforesaid facts and circumstances and the judgment of this Court in M/s.Sadhana Enviro Engineering’s case supra, I am of the view that the present petition also deserves to be allowed and disposed of in terms of the said judgment.

In the result, I pass the following:- ORDER (i) Petition is hereby disposed of in terms of the judgment of this Court in the case of M/s.Sadhana Enviro Engineering Services vs. Joint Commissioner of Central Tax & others – W.P.No.6138/2020 dated 03.09.2024. (ii) The impugned Order at Annexure-D dated 26.09.2023 and impugned demand Notice at Annexure-E dated 27.09.2023 are hereby quashed. (iii) The parties are relegated to the stage of show cause notice dated 17.06.2022 issued by the respondent(s) and the respondents are directed to give effect to and implement the amended provisions contained in Section 118 of “The Finance NC: 2024:KHC:36976 (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. (iv) All rival contentions on all other prayers sought for by the petitioner including the challenge to the statutory provisions are kept open and no opinion is expressed on the same. (S.R.KRISHNA KUMAR) JUDGE

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