M/S Bba Infrustructure LTD vs. Senior Joint Commissioner Of State Tax And Ors

Held

The Court held that the appellant's contention that Section 16(2) overrides Section 16(4) was rejected. The Court found that Section 16(1) is the enabling provision for claiming ITC, while Section 16(2) prescribes the conditions for eligibility, which are mandatory. The Court reasoned that the stipulation in Section 16(2) acts as a restrictive provision, not an enabling one. The Court agreed with the interpretation that the conditions in Section 16(2) must be fulfilled for a dealer to be entitled to claim ITC. The argument that the non-obstante clause in Section 16(2) prevails over Section 16(4) was also rejected, with the Court noting that Section 16(2) does not appear to be a provision that allows ITC but rather restricts it. The Court referred to various Supreme Court decisions, including ALD Automotive, and a High Court decision on a pari materia provision, which upheld the constitutional validity of Section 16(4) and the mandatory nature of its conditions. The Court concluded that the time period prescribed for availing ITC is a mandatory requirement and cannot be diluted by the authorities. Therefore, the appellant was not entitled to the ITC as the returns were filed beyond the statutory time limit.

Facts

M/s. BBA Infrastructure Limited (appellant) filed a writ petition challenging an order-in-appeal dated 04.01.2023, which confirmed a demand for Input Tax Credit (ITC) amounting to Rs. 28,65,780/- for the period November 2018 to March 2019. The denial of ITC was based on the ground that the returns were filed beyond the statutory time limit stipulated in Section 16(4) of the GST Act, which expired on 20.10.2019. The appellant had filed their returns on 20.10.2019. A show-cause notice was issued on 28.10.2020. The department debited Rs. 11,62,099/- from the CGST credit ledger and Rs. 11,34,291/- from the SGST credit ledger. The appellant's writ petition was initially dismissed by a single bench for want of interim orders, leading to the present intra-court appeal. The appeal court heard both the appeal and the writ petition.

Key Issues

1. Whether the Input Tax Credit (ITC) availed by the appellant can be denied solely on the ground that the GSTR-3B returns were filed beyond the statutory time limit stipulated in Section 16(4) of the GST Act, despite the appellant claiming entitlement under Section 16(2)? Appellant's arguments: The appellant contended that ITC is taken through books of account upon receipt of goods/services as per the first proviso to Section 16(2) of the GST Act. They argued that Section 16(4) cannot supersede Section 16(2), as the latter has an overriding effect. They asserted that 'entitlement' to credit under Section 16(1) is a right, and availing it through procedural formalities like filing returns is a choice. They also highlighted the absence of a time limit in Section 16(1) and its lack of linkage with Section 16(4). They relied on the minutes of the 18th GST Council meeting, Notification No. 12 of 2019-CT, Notification No. 76/2018-CT, and decisions in Union of India Versus Bharti Airtel Ltd. and Indsur Global Ltd. Versus Union of India. Revenue's arguments: The respondents argued that statutes must be interpreted holistically, and non-obstante clauses should not be read in isolation. They contended that the purpose of the non-obstante clause must be ascertained and it gives overriding effect to contrary, not complementary, provisions. They submitted that concessions like ITC are not a matter of right but are subject to statutory conditions, and the time limit for filing returns is mandatory.