M/S Naw Krishna Enterprises 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 Articles 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 is violative of fundamental rights. The Court reasoned that fiscal legislation with uniform application cannot be violative of Article 19(1)(g), and the question of violation of Articles 302 and 13 does not arise. Relying on Supreme Court decisions in ALD Automotive Private Limited and Jayam and Company, the Court affirmed that Input Tax Credit (ITC) is a concession that can only be availed by strictly complying with the conditions stipulated in the statute. The Court rejected the submission to read down the provision as directory, emphasizing the clear language of Section 16, which makes the concession of ITC dependent on fulfilling requisite conditions, including those in sub-section (4). The Court found no inconsistency with any fundamental right guaranteed under the Constitution.

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 or orders related to the Goods and Services Tax (GST) regime. The specific tax periods and amounts in dispute are not detailed in the provided excerpt. The procedural history leading to the High Court's consideration is that these writ petitions were heard together.

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 under Article 19(1)(g) of the Constitution, thereby violating 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 guaranteed under Article 19(1)(g) of the Constitution. They argued that the provision is violative of Article 302 and Article 13 of the Constitution, citing the absence of any rationale behind fixing a cut-off date for filing returns. They also feebly argued that the provision should be read down as directory and not mandatory. Revenue/State's arguments: The respondents, Union of India and the State of Bihar, did not have their arguments explicitly detailed in the provided excerpt, but the court's reasoning implies they defended the validity of Section 16(4). The learned Advocate General for the State referred to Supreme Court decisions in ALD Automotive Private Limited and Jayam and Company.