M/S Rewinder Techno Electricals Through Its One Of The Partners Sanjay Gupta vs. Union Of INDIA Thro The Pr Commissioner Central Goods And Services Taxes And Central Excise, Ranchi

Held

The Court noted that the issues raised in the writ application had been considered by the GST Council. Specifically, the 53rd GST Council Meeting, held on June 22, 2024, had taken note of the claims made in the present writ applications. The Court held that the recommendations of the GST Council are to be given due weightage in accordance with law. Consequently, the writ applications were disposed of in view of these recommendations. The Court granted liberty to the petitioner to pursue other remedies in accordance with law before the appropriate forum if any matter remained for consideration. No specific finding was given on the vires of Section 16(4) or Rule 61(5), nor were the impugned orders set aside, as the matter was disposed of based on the GST Council's recommendations.

Facts

The petitioner, M/s Rewinder Techno Electricals, filed a writ application challenging Section 16(4) of the CGST Act, 2017, and an amendment to Rule 61(5) of the CGST Rules, 2017. The petitioner sought to declare these provisions ultra vires, arguing they violated constitutional rights and the basic structure of the GST Act. The petitioner also sought to quash an Order-in-Appeal and an ex-parte Order-in-Original, along with a corrigendum and DRC-07, which confirmed the reversal of Input Tax Credit (ITC) availed for the Financial Year 2018-19, along with interest and penalty, totaling Rs. 6,54,214. The challenge was based on the contention that these actions were arbitrary and against the scheme of the GST Act and Rules.

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, specifically Articles 14, 19(1)(g), and 300A, and the basic structure of the CGST Act, 2017? 2. Whether the amendment to Rule 61(5) of the Central Goods and Services Rules, 2017, inserted by Notification 49/2019-CT dated 09.10.2019, which retrospectively declared GSTR-3B as a valid return under Section 39 of the CGST Act, 2017, is ultra vires the Constitution of India, specifically Articles 14, 19(1)(g), and 300A, by interfering with the vested right to avail ITC? Petitioner's arguments: The petitioner contended that Section 16(4) and the amendment to Rule 61(5) are unconstitutional and arbitrary, infringing upon their fundamental rights and vested rights to claim ITC. They argued that the retrospective effect of the amendment to Rule 61(5) unfairly impacts their ability to claim ITC. The petitioner sought to quash the adverse orders and consequential demands. Revenue's arguments: The judgment does not record any specific arguments made by the respondents.