Vinod Udaipuri vs. Union Of INDIA Through The Secretary Ministry Of Finance Deptt Of Revenue

Held

The Court held that the matter needed to be adjudicated afresh due to the insertion of sub-section (5) under Section 16 of the CGST Act, 2017, by Section 118 of the Finance Act, 2024, which was made effective from July 1, 2017. This new sub-section provides that notwithstanding anything in sub-section (4), registered persons are entitled to take input tax credit in any return filed up to November 30, 2021, for invoices or debit notes pertaining to Financial Years 2017-18, 2018-19, 2019-20, and 2020-21. The Court noted that the impugned order was passed without considering this new provision. Therefore, the impugned Order-in-Original and Summary of Order were quashed and set aside. The matter was remitted to the authority to pass a fresh order, taking into consideration the implication of the newly inserted sub-section (5) of Section 16. The Court explicitly stated it had not entered into the merits of the case. The decision on the ultra vires challenges to Section 16(4) and Rule 61(5) was not made, as the case was remitted for fresh adjudication based on the amended law.

Facts

The petitioner, Vinod Udaipuri, filed a writ petition challenging Section 16(4) of the CGST Act, 2017, and an amendment to Rule 61(5) of the CGST Rules, 2017. The petitioner also challenged an Order-in-Original and Summary of Order passed by the Deputy Commissioner, CGST & Central Excise, Ranchi. These orders disallowed Input Tax Credit (ITC) of Rs. 30,29,010/- for the period July 2018 to March 2019, and imposed demand, interest, and penalty. The petitioner argued that Section 16(4) and the amendment to Rule 61(5) were ultra vires and interfered with their vested right to ITC. The respondents, represented by the Union of India and its revenue authorities, agreed that the matter needed to be adjudicated afresh in light of a subsequent amendment.

Key Issues

1. Whether Section 16(4) of the Central Goods and Services Tax Act, 2017, which imposes a time limit for availing Input Tax Credit, is ultra vires the Constitution of India (Articles 14, 19(1)(g), and 300A) and the basic structure of the CGST Act, 2017? The petitioner contended that the time limit imposed by Section 16(4) is arbitrary and violative of fundamental rights and the legislative scheme. The respondents did not record specific arguments on this issue. 2. Whether the amendment to Rule 61(5) of the CGST Rules, 2017, vide Notification No. 49/2019, declaring GSTR-3B as a valid return retrospectively from July 1, 2017, is ultra vires the Constitution of India (Articles 14, 19(1)(g), and 300A) and interferes with the petitioner's vested right to avail Input Tax Credit? The petitioner argued that this retrospective amendment unfairly impacts their ITC claims. The respondents did not record specific arguments on this issue. 3. Whether the Order-in-Original No. 45/GST/DC/OIO/RND/2023-24 and Summary of Order in GST DRC-07 dated 25.08.2023, disallowing ITC of Rs. 30,29,010/- for July 2018 to March 2019, are liable to be quashed and set aside?