M/S G.P. Hardware vs. The Union Of INDIA

Held

The Court held that sub-section (4) of Section 16 of the CGST/BGST Act is constitutionally valid and does not violate Article 19(1)(g) or Article 300-A of the Constitution. The Court found no merit in the petitioners' arguments that the provision imposes unreasonable restrictions or is in conflict with fundamental rights. The Court rejected the plea to "read down" the provision, stating there was no necessity for it. Relying on Supreme Court decisions in ALD Automotive Private Limited and Jayam and Company, the Court affirmed that Input Tax Credit is a concession that can only be availed by strictly complying with the conditions laid down in the statute. The Court found the language of Section 16(4) to be clear and unambiguous, making the requirement mandatory, not directory. Consequently, the writ applications were dismissed.

Facts

Multiple petitioners, including Gobinda Construction, Shtrudhan Kumar Amit Kumar, Shiva Escorts, Komal Medical Agency, M/s Ram Kishun Saw Mill Trading and Company, Shanti Motors, Mrityunjay Kumar (M/s J.M.C.M. Sales Patna), Neelam Automobiles, and Nidhi Trading Company, filed writ petitions before the Patna High Court. These petitions challenged actions taken by various GST authorities. While the specific orders or actions under challenge and the tax periods are not detailed for each petitioner, the overarching issue pertains to the denial or restriction of Input Tax Credit (ITC) due to non-compliance with certain provisions of the CGST/BGST Act. The procedural history indicates these are writ jurisdiction cases filed in 2021, consolidated for hearing.

Key Issues

1. Whether sub-section (4) of Section 16 of the CGST/BGST Act, which imposes a time limit for claiming Input Tax Credit (ITC), is constitutionally valid and does not violate fundamental rights? (Question of Law) 2. Whether sub-section (4) of Section 16 of the CGST/BGST Act imposes unreasonable and disproportionate restrictions on the right to freedom of trade and profession under Article 19(1)(g) of the Constitution, making it violative of Article 302 and Article 13 of the Constitution? (Question of Law) 3. Whether the requirement of sub-section (4) of Section 16 of the CGST/BGST Act should be interpreted as directory rather than mandatory? (Question of Law) Petitioner's arguments: The petitioners contended that sub-section (4) of Section 16 imposes unreasonable restrictions on their right to freedom of trade and profession, violating Articles 19(1)(g), 302, and 13 of the Constitution. They argued for a "reading down" of the provision and suggested it should be treated as directory, not mandatory, due to the absence of a clear rationale for the cut-off date. They relied on the principle that concessions can be availed as per the scheme of the statute. Revenue's arguments: The revenue did not explicitly record arguments in the provided text, but the court's reasoning implies they defended the validity of Section 16(4) and its mandatory nature, citing Supreme Court precedents.