M/S Asp Microsys vs. Union Of INDIA & Ors.
Original PDF →Facts
The petitioner, M/s ASP Microsys, challenged an Order-in-Original dated April 30, 2024, and the constitutional validity of Section 16(4) of the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner's primary grievance regarding Section 16(4) was subsequently addressed by amendments introduced by the Finance (No.2) Act, 2024. Specifically, Section 16 of the CGST Act was amended to include sub-section (5), which allows registered persons to claim input tax credit for Financial Years 2017-18, 2018-19, 2019-20, and 2020-21 in a return filed up to November 30, 2021. This amendment came into force from September 27, 2024, as per a notification.
Held
The Court allowed the writ petition. The primary issue regarding the constitutional validity of Section 16(4) of the CGST Act was not pressed by the petitioner, as their grievance was addressed by the subsequent amendment introducing Section 16(5). The Court followed its previous decision in I C Electricals Company Pvt. Ltd. vs Union of India. The reasoning was that the introduction of Section 16(5) by the Finance (No.2) Act, 2024, provided a mechanism for registered persons to claim input tax credit for specific financial years, thereby resolving the issue that led to the challenge. The Court found that the respondents had no objection to a remand for re-adjudication. Therefore, the impugned Order-in-Original dated April 30, 2024, was quashed. The matter was remitted back to the third respondent (the Adjudicating Authority) to examine the case afresh, taking into consideration the provisions of Section 16(5) of the CGST Act. No issue was expressly left undecided.
Key Issues
1. Whether the challenge to the constitutional validity of Section 16(4) of the CGST Act is pressed by the petitioner in light of the amendments introduced by the Finance (No.2) Act, 2024? 2. Whether the impugned Order-in-Original dated April 30, 2024, should be set aside and the matter remanded for re-adjudication in light of the newly inserted Section 16(5) of the CGST Act? Petitioner's Arguments: The petitioner, through its counsel, stated that its grievance concerning Section 16(4) is now satisfied due to the introduction of Section 16(5) by the Finance (No.2) Act, 2024. The petitioner explicitly stated it was not pressing the challenge to the constitutional validity of Section 16(4). The petitioner sought a remand of the matter for re-adjudication in light of the statutory amendments. Revenue's Arguments: The respondents, represented by their counsel, stated they had no objection if the order passed pursuant to the impugned Show Cause Notice was set aside and the matter was remanded to the Adjudicating Authority for re-adjudication in light of the statutory amendments introduced by the Finance (No.2) Act, 2024.
Sections Cited
Section 16(4), Section 16(5)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R %
2024
The petitioner has impugned the Order-in-Original dated 30 April 2024 and additionally assails the validity of Section 16(4) of the Central Goods and Services Tax Act, 2017 [‘CGST Act’].
The principal grievance of the writ petitioner with respect to sub-section (4) of Section 16, however, according to learned counsel, now stands satisfied in light of the amendments which have come to be introduced in Section 16 by virtue of Finance (No.2) Act, 2024. 3. We note that in terms of Section 118 of the aforesaid enactment, a sub-section (5) has come to be introduced in Section 16 of the CGST Act and which reads as follows: “(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 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/11/2024 at 14:34:35
W.P.(C) 12537/2024 tax credit in any return under section 39 which is filed up to the thirtieth day of November, 2021.”
We note that the Finance (No.2) Act, 2024 had provided that sub-section (5) would come into force from such date as may be notified by the Union Government. Learned counsel appearing for the writ petitioner has placed for our perusal a Notification dated 27 September 2024, in terms of which Section 118 of Finance Act (No.2) of 2024 has been declared to come into force from the date of that Notification. A copy of the Notification which was placed for our perusal may be included on our digital record.
Taking note of the aforesaid amendments, the Court in I C Electricals Company Pvt. Ltd. vs Union of India [W.P.(C) 1541/2024 decided on 23 August 2024], had while dealing with an identical challenge disposed of the writ petition by observing as follows:
“4. Learned counsel appearing for the petitioner submits that in view of the introduction of sub-section 5 of Section 16 of the CGST Act/DGST Act by virtue of Finance (No.2) Act, 2024, the petitioner’s grievance with regard to the impugned SCN would be addressed if the matter is remanded to the concerned authority to re-adjudicate the impugned SCN once again in the light of introduction of sub-section 5 of Section 16 by Finance (No.2) Act, 2024. 5. The learned counsel for petitioner unequivocally states that the petitioner is not pressing the challenge to the constitutional validity of Section 16(4) of CGST Act/DGST Act.
Mr. Singla, learned counsel for the respondent no.2, states that the respondent has no objection if the order passed pursuant to the impugned SCN is set aside and the matter is remanded to the Adjudicating Authority to re-adjudicate the impugned SCN in light of the statutory amendments introduced by Finance (No.2) Act, 2024.”
Following the aforesaid, we allow the instant writ petition and quash the impugned Order-in-Original of 30 April 2024. The matter shall stand revived before the third respondent who shall examine the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/11/2024 at 14:34:35
W.P.(C) 12537/2024 case afresh and bearing in mind the provisions enshrined in Section 16(5) of the CGST Act. YASHWANT VARMA, J. RAVINDER DUDEJA, J. NOVEMBER 5, 2024/sky This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/11/2024 at 14:34:35
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.