M/S Sanjay Indane 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 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 considered violative of Article 19(1)(g). Relying on Supreme Court decisions in ALD Automotive Private Limited and Jayam and Company, the Court emphasized that input tax credit is a concession granted by statute, and the conditions stipulated therein, including the time limits for claiming it, must be strictly complied with. The Court rejected the argument that the provision should be read down or interpreted as directory, citing the clear language of Section 16. The Court concluded that the provision is not inconsistent with or in derogation of any fundamental right. 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 or orders related to the Goods and Services Tax (GST) regime. The specific details of the orders or actions under challenge, the tax periods, and the amounts in dispute are not explicitly detailed for each petitioner in the provided excerpt. The procedural history indicates these were writ jurisdiction cases filed before the High Court.

Key Issues

1. Whether sub-section (4) of Section 16 of the CGST/BGST Act, which imposes a cut-off date for claiming input tax credit (ITC), is constitutionally valid? (Question of law) 2. Whether sub-section (4) of Section 16 of the CGST/BGST Act imposes an unreasonable and disproportionate restriction on the right to freedom of trade and profession guaranteed under Article 19(1)(g) of the Constitution, thereby violating 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 argued that sub-section (4) of Section 16 imposes unreasonable restrictions on their right to trade and profession under Article 19(1)(g), is violative of Article 302, and in teeth of Article 13 of the Constitution, due to the absence of rationale behind the cut-off date for filing returns. They also feebly argued for the provision to be read as directory. They relied on the principle of reading down statutory provisions when necessary. Revenue/State's arguments: The State referred to the Supreme Court's decision in ALD Automotive Private Limited, which dealt with a similar challenge to Section 19(11) of the Tamil Nadu Value Added Tax Act, 2006. They also referred to Jayam and Company, emphasizing that ITC is a concession and its conditions must be strictly complied with. The State argued 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.