M/S Mohan Kedia Traders 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. The Court found no merit in the petitioners' arguments that the provision imposes unreasonable restrictions or is inconsistent with fundamental rights. The reasoning relied on Supreme Court judgments, particularly ALD Automotive Private Limited and Jayam and Company, which established that Input Tax Credit (ITC) is a concession granted by statute, and the conditions stipulated for availing such concessions must be strictly complied with. The Court rejected the plea to read down the provision as directory, emphasizing the clear language of Section 16, which makes the concession of ITC dependent on fulfilling the laid-down conditions. The Court concluded that fiscal legislation with uniform application cannot be violative of Article 19(1)(g), and the question of violation of Articles 302 and 13 did not arise. 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, Neelam Automobiles, and Nidhi Trading Company, filed writ petitions before the Patna High Court. The petitions challenged actions or sought relief related to the Goods and Services Tax (GST) regime. While the specific tax periods and amounts in dispute are not detailed for each petitioner, the core issue revolves around the interpretation and application of Section 16(4) of the CGST/BGST Act concerning the availment of Input Tax Credit (ITC). The procedural history indicates these matters were heard together by the High Court.

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 not violative of fundamental rights. 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 guaranteed under Article 19(1)(g) of the Constitution, and is thus violative of Article 302 and Article 13 of the Constitution. Petitioner's arguments: The petitioners contended that sub-section (4) of Section 16 imposes unreasonable restrictions on their right to trade and profession under Article 19(1)(g) and is violative of Articles 302 and 13 of the Constitution due to the absence of a rationale behind the cut-off date for filing returns. They also argued for the provision to be read down as directory rather than mandatory. Revenue's arguments: The revenue authorities did not present specific arguments in the provided text, but the court's reasoning implies reliance on established legal principles regarding fiscal legislation and the nature of concessions granted under statutes. The court referred to Supreme Court decisions in ALD Automotive Private Limited and Jayam and Company to support its findings.