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ITC accrued as on 30.6.2017─Curtailing the rights of assessees by carrying out the retrospective amendments in S.140 by introduction of time limit for its claiming

OmPrakash jain
GST Act Amendment Sets Time Limit on ITC Claims, Challenging Past Court Rulings and Sparking Legal Debates The retrospective amendments to Section 140 of the GST Act, effective from July 1, 2017, impose a time limit on claiming Input Tax Credit (ITC), which was previously considered an accrued vested right under Article 300A of the Constitution. This move by the Central Board of Indirect Taxes and Customs (CBIC) has been criticized for overturning favorable court judgments and denying rightful claims, despite no financial loss to the government. The amendments are seen as a revenue-focused approach, leading to unnecessary litigation and public harassment. Legal recourse may still be possible under constitutional provisions and past court rulings. (AI Summary)

The Ratio decidendi of Supreme court and various High courts that;

“Input Tax/CENVAT Credit which has been accrued in Erstwhile Law prior to introduction of GST, is a Accrued Vested Right and Property of the Assessee under Article 300A of the Constitution”,

has been annulled after the retrospective amendments in S.140 w.e.f. 1.7.2017 by inserting the words ‘within such time and’,

Therefore until and unless the retrospective amendments in S.140 is stayed &/or declared ultra virus by the Judiciary, the provisions of Limitation Act will not prevail since taxing statutes are to be interpreted literally as per Supreme Court case of The State of Karnataka v. M.K. Agro Tech Pvt. Ltd.  2017 (9) TMI 1308 - SUPREME COURT .

It is Draconian step on the part of CBIC, who has carried out retrospective amendments in S.140, leave apart many decided cases in favour of the taxable persons. inspite of no loss to the Government in carry forward of accrued ITC, the amendments in S.140, w.e.f. 1.7.2017, is a result of some egoistic bureaucrats adopting only revenue oriented approach reflected in their working. They are adamant in denying the rightful claim of the assessees. It has been observed in the past that every time, the fair judgments of various courts in GST are being turned down by CBIC, by bringing amendments in Act and/or rules. The Govt. is wasting lot of public money in unwanted litigations, which lead to harassing the public at large.

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CA Om Prakash Jain, Jaipur, 9414300730, [email protected]

Goods and Services Tax - GST
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Ganeshan Kalyani on May 24, 2020

If the window of claiming transitional credit is closed, can anybody claim it thru 3B and fight at the time of litigation. Your view Sir.

OmPrakash jain on May 25, 2020

Sir,

Since CBIC has taken Draconian steps byretrospective amendments in S.140, w.e.f. 1.7.2017, so as to nullify all the favourable judgments of different courts and have determined to reject the genuine claims of the assessees.

The Supreme Court has also held that the taxing statutes are to beinterpreted literally : The State of Karnataka v. M.K. Agro Tech Pvt. Ltd. 2017 (9) TMI 1308 - SUPREME COURT, Commissioner of Customs v. Dilip Kumar and Company 2018 (7) TMI 1826 - SUPREME COURT, Eureka Forbes Limited v. State of Bihar and Ors. 2014 (7) TMI 235 - SUPREME COURT.

It has also been held by the Supreme Court that the court only interprets the law within the four corners of the Act and cannot legislate it under the disguise of interpretation. In case a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal : Vemareddy Kumaraswamy Reddy v. State of A.P. 2006 (2) TMI 640 - SUPREME COURT.

Moreover, it has been observed in the past, that every time, the fair judgments of various courts in GST are being turned down by CBIC, by bringing amendments in Act and/or rules, by harassing the public at large.

In view of the above, it is very difficult that the Govt. will take cognizance of any thing put up by the assessee in the matter.

Still there can be some hope in view of the following;

1. Art. 265, Constitution of India :Jakap Metind Pvt. Ltd. v. Union of India & Ors. 2019 (11) TMI 710 - GUJARAT HIGH COURT.

2.Denial of property right under Art.300A, Constitution of India : Union of India & Ors. v. Adfert Technologies Pvt. Ltd. 2020 (3) TMI 188 - SC ORDER

3. Denial of property right under Art.300A, Constitution of India : The review petition filed by the Govt. against the judgment of Siddharth Enterprises v. The Nodal Officer & Ors. 2019 (9) TMI 319 - GUJARAT HIGH COURT has been dismissed by the court : Nodal Officer & Ors. v. Siddharth Enterprises 2020 (2) TMI 1240 - GUJARAT HIGH COURT.

4. Principle of double taxation :Double taxation would be violative of Art.14, 19(1)(g) and 265 of the Constitution of India: 2016 (9) TMI 519 - SUPREME COURT Larsen & Toubro Ltd. v. Addl. Dy. Commissioner of CT (SC), 2006 (10) TMI 377 - ANDHRA PRADESH HIGH COURT Larsen & Toubro Ltd. v. State of A.P. and Others (AP) , 2008 (8) TMI 21 - SUPREME COURT State of A.P. v. Larsen & Toubro Ltd.(SC)

Therefore the way suggested by you can be resorted to, to take a chance.

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