Ms Shree Gangotri Industries Through Its Proprietor Deen Dayal Singh vs. Union Of INDIA Through The Secretary Ministry Of Finance Deptt Of Revenue

Held

The Court noted that the issues raised in the writ applications had been considered in the 53rd GST Council Meeting held on June 22, 2024. The Council made recommendations concerning the claims made in the writ petitions. Consequently, the Court held that the recommendations of the GST Council should be given due weightage in accordance with the law. Based on these recommendations, the writ applications were disposed of. The Court also granted liberty to the petitioners to pursue their remedies before the appropriate forum if any matter remained for consideration. The specific findings on the vires of Section 16(4) and Rule 61(5) were not detailed as the matter was disposed of based on the GST Council's recommendations.

Facts

The petitioners, various business entities including M/s B D Enterprises, M/s TRIMURTHY SALES CORPORATION, SHRI KUMARAN CONSTRUCTION CO., M/s SWASTIK ENTERPRISES, M/s SRI RAM CONSTRUCTION, Sumati Gas Service, M/s JM Spares, and M/s Jyoti Distributors & Traders, filed writ petitions before the Jharkhand High Court. They challenged Section 16(4) of the Central Goods and Services Tax Act, 2017, and an amendment to Rule 61(5) of the Central Goods and Services Rules, 2017, introduced by Notification No. 49 of 2019. The petitioners sought to declare these provisions ultra vires and quash consequential show cause notices issued by the revenue authorities. The primary dispute revolved around the time limit for availing Input Tax Credit (ITC).

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 (ITC), is ultra vires the Constitution of India, specifically Articles 14, 19(1)(g), and 300A, thereby violating fundamental rights and property rights? 2. Whether the amendment to Rule 61(5) of the Central Goods and Services Rules, 2017, inserted by Clause 4(a) of Notification No. 49 of 2019, is ultra vires and consequentially, whether show cause notices issued based on these provisions are liable to be quashed? Petitioner's Arguments: The petitioners contended that Section 16(4) of the CGST Act, 2017, is unconstitutional as it arbitrarily restricts the availment of ITC, thereby infringing upon their right to carry on business (Article 19(1)(g)) and their right to property (Article 300A). They argued that the time limit is discriminatory and violates Article 14. They also challenged the validity of the amendment to Rule 61(5) and the consequent show cause notices. Revenue's Arguments: The judgment does not explicitly record the arguments made by the respondents (Union of India and its authorities).