M/S The Photo Shop, (A Sole Properitrship Firm) vs. The 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 Articles 19(1)(g) or 300-A of the Constitution of India. The Court found no merit in the petitioners' arguments that the provision imposes unreasonable restrictions or is violative of fundamental rights. The Court reasoned that fiscal legislation with uniform application cannot be violative of Article 19(1)(g). Relying on Supreme Court judgments in ALD Automotive Private Limited and Jayam and Company, the Court affirmed that ITC is a concession granted by statute, and its conditions must be strictly complied with. The Court rejected the plea to read down the provision or declare it directory, emphasizing the clear language of Section 16. The concession of ITC is dependent on fulfilling the conditions laid down, including those in sub-section (4). Therefore, 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 are primarily challenging the provisions of the Goods and Services Tax (GST) law, specifically concerning the availment of Input Tax Credit (ITC). The petitions contested the validity and interpretation of certain sections of the CGST/BGST Act, which impose restrictions on claiming ITC. The respondents are various authorities of the Union of India and the State of Bihar.

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. 2. Whether the said provision imposes unreasonable and disproportionate restrictions on the right to freedom of trade and profession guaranteed under Article 19(1)(g) of the Constitution, and is violative of Article 302 and Article 13 of the Constitution. Petitioner's arguments: The petitioners contended that sub-section (4) of Section 16 of the CGST/BGST Act imposes unreasonable and disproportionate restrictions on their right to freedom of trade and profession under Article 19(1)(g), making it violative of Article 302 and Article 13 of the Constitution. They argued for a "reading down" of the provision due to the absence of a rationale behind the cut-off date for filing returns. They also argued that the requirement of sub-section (4) of Section 16 should be treated as directory and not mandatory. Revenue's arguments: The revenue authorities did not present specific arguments in the provided text, but the court's reasoning implies they defended the constitutional validity of the provision. The court relied on Supreme Court decisions to support the revenue's position.