Ms Rn Die Castings vs. Additional Commissioner

Held

The Court did not decide the issues on merits. The learned counsel for the petitioner, after making submissions, conceded that the core of the issue related to the interpretation of the provision, not its vires. Consequently, the petitioner prayed for withdrawal of the writ petition with liberty to avail the statutory remedy of appeal. The Court accepted this submission and dismissed the writ petition as withdrawn, granting the petitioner liberty to pursue the statutory appeal process if they so advised. No specific findings were made on the constitutional validity or interpretation of Section 16(2)(b) of the CGST Act, 2017, nor were any operative directions issued regarding the impugned orders or notices, other than dismissing the petition.

Facts

The petitioner, M/s R N Die Castings, filed a writ petition before the Uttarakhand High Court challenging an Order-in-Original and a Show Cause Notice issued by the Additional Commissioner, Central Goods and Services Tax. The impugned orders, dated March 30, 2026, and June 28, 2025, respectively, were passed under Section 74 of the GST Act, 2017. The petitioner sought various reliefs, including a declaration that Section 16(2)(b) of the CGST Act, 2017, is arbitrary and unconstitutional, and alternatively, a reading down of the said section. The petitioner also prayed for quashing of the Show Cause Notice and the Order-in-Original, and for a fresh consideration of their case by the respondent authority. The amount in dispute is not explicitly stated.

Key Issues

1. Whether Section 16(2)(b) of the CGST Act, 2017, is arbitrary, unreasonable, and violative of Articles 14, 19(1)(g), 265, and 300A of the Constitution of India? (Question of constitutional law) 2. Whether Section 16(2)(b) of the CGST Act, 2017, should be read down to consider supplies valid even if the supplier's GST registration is cancelled retrospectively after the supply, without mandating a Toll Receipt as proof of goods receipt? (Question of statutory interpretation) Petitioner's Arguments: The petitioner argued that Section 16(2)(b) of the CGST Act is unconstitutional. Alternatively, they contended that the provision should be interpreted to allow input tax credit even when a supplier's GST registration is cancelled retrospectively, provided the goods were received, and that a Toll Receipt should not be the sole mandatory document for proving receipt of goods. The petitioner did not explicitly cite any specific authorities or precedents in the provided text for these arguments. Respondents' Arguments: The judgment does not record any specific arguments made by the respondents.