M/S Ram Sagar Roy And Company vs. The Stat Of Bihar

Held

The Court held that sub-section (4) of Section 16 of the CGST/BGST Act is constitutionally valid. The Court found no merit in the petitioners' submissions that the provision imposes unreasonable restrictions or violates Article 19(1)(g) of the Constitution. The Court reasoned that fiscal legislation with uniform application cannot be violative of Article 19(1)(g), and the question of it being violative of Article 302 or Article 13 of the Constitution does not arise. Relying on Supreme Court judgments in ALD Automotive Private Limited and Jayam and Company, the Court emphasized that ITC is a concession, and its benefit is contingent upon strict compliance with the conditions laid down in the statute. The Court rejected the argument to read down the provision as directory, stating that the clear language of Section 16 makes the fulfillment of conditions, including sub-section (4), mandatory for claiming ITC. The Court explicitly stated that the provision is not inconsistent with or in derogation of 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 these writ petitions is not fully elaborated, but it appears to involve challenges to the interpretation and application of GST provisions by various tax authorities.

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 is violative of Article 19(1)(g) of the Constitution, which guarantees the freedom of trade and profession, due to imposing unreasonable restrictions? 3. Whether the provision is in teeth of Article 13 of the Constitution and violative of Article 302 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. They argued that there is no rationale behind fixing a cut-off date for filing returns and that the provision should be read down to be directory, not mandatory. They also argued that the provision is violative of Article 19(1)(g), Article 302, and Article 13 of the Constitution. Revenue/State's arguments: The State, through the learned Advocate General, referred to Supreme Court decisions in ALD Automotive Private Limited and Jayam and Company, which upheld similar provisions in other tax statutes. The State argued that ITC is a concession that can only be availed by strictly complying with the statutory conditions, and the provision is not arbitrary or violative of fundamental rights.