Roshan Ranjan vs. Union Of INDIA

Held

The Patna High 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 of India. The Court found no merit in the petitioners' arguments that the provision imposes unreasonable restrictions or that it is inconsistent with fundamental rights. The Court reasoned that fiscal legislation with uniform application cannot be considered violative of Article 19(1)(g). Relying on Supreme Court judgments in ALD Automotive Private Limited and Jayam and Company, the Court reiterated that Input Tax Credit is a concession extended by the statute, and its availment is conditional upon strict compliance with the conditions laid down therein, including the time limits specified. The Court rejected the plea to read down the provision as directory, emphasizing the clear and mandatory language of Section 16(4). 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 petitioners challenged the provisions of the Goods and Services Tax (GST) Act, specifically concerning the denial of Input Tax Credit (ITC) due to non-compliance with certain time limits for availing such credit. The petitions were filed against various authorities of the Union of India and the State of Bihar, including the Ministry of Finance, Commissioners of CGST and Central Excise, and Commissioners of State Tax. The core of the dispute revolved around the interpretation and constitutional validity of Section 16(4) of the CGST Act.

Key Issues

1. Whether sub-section (4) of Section 16 of the CGST/BGST Act, which imposes a time limit for availing Input Tax Credit (ITC), is constitutionally valid and not violative of fundamental rights. Petitioner's arguments: The petitioners contended that sub-section (4) of Section 16 imposes an unreasonable and disproportionate restriction on the right to freedom of trade and profession guaranteed under Article 19(1)(g) of the Constitution. They argued that the absence of any rationale behind fixing a cut-off date for filing returns makes the provision violative of Article 302 of the Constitution and Article 13 of the Constitution. They also argued that the provision should be read down to be directory rather than mandatory. Revenue's arguments: The respondents (Union of India and State of Bihar) argued that fiscal legislation with uniform application cannot be violative of Article 19(1)(g). They relied on Supreme Court decisions in ALD Automotive Private Limited and Jayam and Company, which upheld similar provisions in other tax statutes, emphasizing that ITC is a concession and its availment is subject to strict compliance with statutory conditions. They asserted that the plain language of Section 16(4) makes it mandatory.