Constitutional Challenge to GST Act: Retrospective Amendments & Tax Payment Requirements Questioned

The court is examining the constitutional validity of Section 16(4) of the GST Act, 2017, challenging its arbitrariness and violation of constitutional articles. The retrospective amendments in Rule 61 of the Rules are also contested as unconstitutional. The court has issued notice to the respondents for further proceedings. The judgment emphasizes concerns over retrospective amendments, denial of Input Tax Credit, and the reasonableness of tax payment requirements for return filing under the GST Act.

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Issues: Constitutional validity of Section 16(4) of the GST Act, 2017; Retrospective amendments in Rule 61 of the Rules; Validity of para 4 of the C.B.I. & C. Press Release No.56/2018; Applicability of Section 39 of the Act and GSTN portal restrictions.

In the present writ application, the challenge is to the constitutional validity of Section 16(4) of the GST Act, 2017 on the basis of being manifestly arbitrary and contravening Articles 14, 19(1)(g), and 300A of the Constitution. The argument raised is that taxpayers should not suffer due to the failure of the authorities to notify Forms GSTR-2 and GSTR-3, leading to denial of Input Tax Credit (ITC). Additionally, the retrospective amendment in Rule 61 of the Rules is contested as unconstitutional, violating Article 14 of the Constitution. The retrospective amendment to Rule 61(5) and the deletion of Rule 61(6) are also challenged as unconstitutional, breaching Article 279A of the Constitution. Moreover, the petition challenges para 4 of the C.B.I. & C. Press Release No.56/2018, asserting that any delay in filing returns renders ITC time-barred, as arbitrary and seeks its annulment.

Furthermore, the petitioner contends that Section 39 of the Act should not prohibit return filing without tax payment, and the restriction on the GSTN portal preventing return submission without tax payment is deemed arbitrary and unreasonable, violating Article 14 of the Constitution. The court has issued notice to the respondents, returnable on 25th March 2021, with direct service through E-mail. Additionally, the court has instructed the provision of the entire paper book to the learned Additional Solicitor General of India for the respondents. The judgment reflects a detailed analysis of the constitutional validity of various provisions under the GST Act, highlighting concerns regarding retrospective amendments, denial of ITC, and the reasonableness of tax payment requirements for return filing.

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