M/S Ekaa Engineers And vs. Union Of INDIA
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Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, petitioner seeks for the following reliefs:-
“a) Issue a writ or order or direction in the nature of any writ declaring that Sub-section (4) to Section 16 of the Central Goods and Service Tax Act, 2017 and the Karnataka Goods and Service Tax Act, 2017 is illegal, ultra vires and unreasonable in law;
b) Alternatively, issue a writ or order or direction in the nature of any writ declaring that the accounting of input tax credit in the books of account of the Petitioner is the date NC: 2024:KHC:37068 of availment of ITC and consequently, the restriction imposed under Sub-section (4) to Section 16 of the CGST Act, 2017 is not binding on the Petitioner;
c) Alternatively, issue a writ or order or direction in the nature of any writ declaring the Sub-section (4) to section 16 of the CGST/KGST Act, 2017 is not binding on the Petitioner in view of seizure of original invoices;
d) Issue a writ or order or direction in the nature of any writ declaring that Sub-rule (5) and (6) to Rule 61 of the Central Goods and Service Tax Act, 2017 substituted through Notification No.17/2017-Central Tax, dated 27.07.2017 (Annexure-C) by way of retrospective amendment with effect from 01.07.2017 is illegal, ultar vires and unreasonable in law;]
e) Issue a writ or order or direction in the nature of any writ declaring that the return required to be furnished in Form GSTR – 3B as an incomplete, non-est, and invalid return in the eye of law;
f) Issue a writ or order or direction in the nature of Certiorari by quashing the impugned Summary of Show Cause Notice bearing T.No.1123/22-23 (Reference No:JCCT(A)/DGSTO-3/73 &74/09/2021-22) issued in FORM GST DRC- 01 dated 20.01.2022 along with Show Cause Notice bearing T.No. /2022-2033 dated 16.09.2022 (Annexure-A) by the 5th Respondent and consequential Summary of the Order along with Order bearing Reference No.JCCT(A)/DGSTO-3/73 &74/09/2021-22 issued in FORM GST DRC- 07 dated 30.11.2022 (Annexure-B) NC: 2024:KHC:37068 passed under Section 73(9) of the CGST & KGST Act, 2017 and thereby declare that the input tax credit claimed by the Petitioner for the period July 2017 to March 2018 is in accordance with the provisions of Section 16(1) of the CGST Act, 2017/ KGST Act, 2017;
g) Pass such other orders or directions as deemed fit and proper in the facts and circumstances of the case in the interest of justice.”
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:- “2. 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 NC: 2024:KHC:37068 reliefs, during the pendency of the present petition, a new provision i.e., Section 16(5) has been inserted by “The 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. NC: 2024:KHC:37068
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 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 NC: 2024:KHC:37068 (ii)xxxxxxxxxxxxxx ”
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 / NC: 2024:KHC:37068 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 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-B dated 30.11.2022 is hereby quashed. (iii) The parties are relegated to the stage of show cause notice dated 16.09.2022 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:37068 (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
Srl/Mds
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.