2020 (3) TMI 1154 - HC - VAT and Sales Tax

Court dismisses challenge to input tax credit validity time limit under CGST Rules. Petitioner withdraws.

The court dismissed the challenge to the validity of the prescription of entitlement of credit of input tax within a time limit under Rule 117 of the CGST ... Summary order. Writ petition dismissed as withdrawn; no order as to costs; connected miscellaneous petitions closed. Issues: Challenge to validity of prescription of entitlement of credit of input tax within a time limit under Rule 117 of Central Goods and Services Tax Rules, 2017; Allegation of discrimination in extending benefits to different classes of assessees under the same rule.Analysis:1. The petitioner, a dealer purchasing Tyre Patches, contested the limitation on credit of input tax under Rule 117 of the CGST Rules, 2017, claiming it violated substantive rights under Section 140 of the CGST Act, 2017. The argument emphasized that time prescription should not impede the right to credit, citing judgments from Gujarat and Punjab & Haryana High Courts. The contention was that the entitlement to credit cannot be diluted by time restrictions introduced by Rule 117(1)(A).2. The second argument raised was regarding the creation of two classes of assessees under the same rule, granting benefits to new regime assessees but not extending the same to the petitioner, who was an assessee under prior regimes. This differential treatment was viewed as discriminatory, potentially infringing Article 14 of the Indian Constitution. The petitioner highlighted the need for uniformity in benefits across all assessees to avoid discrimination.3. The petitioner also mentioned a pending writ petition challenging the Act and Rules, noting a potential amendment in the Finance Bill to address the time limit issue under Section 140. The petitioner anticipated that retrospective amendments might impact ongoing challenges, but emphasized the continued relevance of the discrimination argument unless addressed by the new Finance Bill. The court suggested obtaining instructions on the Finance Bill's progress to assess its impact on the ongoing challenge.4. Subsequently, the petitioner's counsel expressed a decision not to proceed with the challenge to the provisions in the writ petitions, seeking permission to withdraw the petitions. The court accepted the withdrawal, leading to the dismissal of the writ petition without costs. The judgment concluded by closing all connected miscellaneous petitions, bringing the legal proceedings to a close without further orders or costs.