Shri Raj Communication vs. Union Of INDIA

Held

The Court held that Section 16(4) of the Bihar Goods and Services Tax Act, 2017, is constitutionally valid. This decision was based on a prior judgment of a Co-ordinate Bench of the same High Court, passed on 08.09.2023 in CWJC No.9108 of 2021 and other analogous cases. The Court respectfully followed the aforesaid judgment. The reasoning behind the prior judgment, which this Court adopted, is not detailed in the present order, but it is implied that the prior judgment found the provision to be intra vires the Constitution. The ratio decidendi is that provisions similar to Section 16(4) of the BGST Act have been upheld by this Court. The operative direction was to dismiss the writ petition.

Facts

The petitioner, Shri Raj Communication, a proprietary concern, filed a writ petition before the Patna High Court challenging the constitutional validity of Section 16(4) of the Bihar Goods and Services Tax Act, 2017. The respondents are the Union of India and various authorities of the State of Bihar and CGST. The specific tax period and the amount in dispute are not recorded in the judgment. The procedural history is that this writ petition was filed seeking to challenge the said provision of law.

Key Issues

1. Whether Section 16(4) of the Bihar Goods and Services Tax Act, 2017, is constitutionally valid? The petitioner likely argued that this provision is unconstitutional, potentially infringing on their right to claim Input Tax Credit (ITC) under certain conditions. The revenue, represented by the Union of India and the State of Bihar, would have argued for the constitutional validity of the provision, likely contending that it is a reasonable restriction and within the legislative competence of the State. The judgment does not explicitly detail the arguments of each side, but it refers to a previous judgment of a Co-ordinate Bench that answered this question in favour of the revenue.