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High-Stakes Tax Credit Battle: Section 16(2)(c) Challenged as Potential Barrier to Fair Input Tax Treatment Under GST Framework
HC examined constitutional challenge to OGST/CGST Act's Section 16(2)(c) regarding input tax credit. Petitioner contested tax demand for 2017-2018 periods, challenging provisions as potentially unjust. Court issued notice to revenue authorities, mandated 20% tax deposit as interim measure, and scheduled further hearing to assess statutory interpretation and potential violation of constitutional principles.
Issues: Challenge to the vires of Clause (c) of Sub-section (2) of Section 16 of the Odisha Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017.
Summary: 1. The petitioner challenged the vires of Clause (c) of Sub-section (2) of Section 16 of the OGST Act/CGST Act, regarding entitlement to credit of input tax, based on an order raising a demand for tax, interest, and penalty for the tax periods July 2017 to March 2018.
2. The petitioner's counsel argued that the assessment under Section 73 of the OGST/CGST Act was unjust as it held the recipient liable for the supplier's default in showing the transaction in Form-GSTR-3B, leading to additional tax, interest, and penalty.
3. The Revenue's counsel mentioned the availability of appeal under Section 107 of the OGST/CGST Act but acknowledged the constitutional challenge based on Articles 14 and 19(1)(c) read with Article 265 of the Constitution of India, requesting time to file a counter affidavit.
4. The Court issued notice to the opposite parties, directing service of extra copies of the writ petition and briefs for their response by a specified date, and ordered an interim measure for the petitioner to deposit 20% of the tax amount within four weeks to avoid coercive action pending the writ petition's disposal.
5. The matter was scheduled to be listed with another case on a specified date, and an urgent certified copy of the order was to be issued according to rules.
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