TaxTMI 
TaxTMI 
2023 (9) TMI 902
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....se No. 4694 of 2021) For the Petitioner/s : Mr. Gautam Kumar Kejriwal For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Civil Writ Jurisdiction Case No. 5636 of 2021) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K. N. Singh ( Asg ) (In Civil Writ Jurisdiction Case No. 5747 of 2021) For the Petitioner/s : Mr. Anurag Saurav For the Respondent/s : Mr. Dr. K. N. Singh ( Asg ) (In Civil Writ Jurisdiction Case No. 6627 of 2021) For the Petitioner/s : Mr. Gautam Kumar Kejriwal For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Civil Writ Jurisdiction Case No. 6630 of 2021) For the Petitioner/s : Mr. Gautam Kumar Kejriwal For the Respondent/s : Mr. Dr. K. N. Singh ( Asg ) (In Civil Writ Jurisdiction Case No. 6638 of 2021) For the Petitioner/s : Mr. Gautam Kumar Kejriwal For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Civil Writ Jurisdiction Case No. 7478 of 2021) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Civil Writ Jurisdiction Case No. 7666 of 2021) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Ci....
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....22) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. Krishna Nandan Singh (Asg) (In Civil Writ Jurisdiction Case No. 763 of 2022) For the Petitioner/s : Mr.Mohit Agarwal For the Respondent/s : Mr. Dr. Krishna Nandan Singh (Asg) (In Civil Writ Jurisdiction Case No. 1853 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar (SC 11) (In Civil Writ Jurisdiction Case No. 1860 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar (SC 11) (In Civil Writ Jurisdiction Case No. 1867 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar (SC 11) (In Civil Writ Jurisdiction Case No. 1890 of 2022) Mr. Archana Sinha @ Archana Shahi Mr. Vikash Kumar (Sc 11) (In Civil Writ Jurisdiction Case No. 2200 of 2022) For the Petitioner/s : Mr.Vikas Kumar For the Respondent/s : Mr. Vikash Kumar (Sc 11) (In Civil Writ Jurisdiction Case No. 2347 of 2022) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K. N. Singh (Asg ) (In Civil Writ Jurisdiction C....
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....the Respondent/s : Mr. Vikash Kumar (SC 11) (In Civil Writ Jurisdiction Case No. 5128 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 5160 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar ( Sc 11 ) (In Civil Writ Jurisdiction Case No. 5161 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 5162 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar ( Sc 11 ) (In Civil Writ Jurisdiction Case No. 5246 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar ( Sc 11 ) (In Civil Writ Jurisdiction Case No. 5304 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar ( Sc 11 ) (In Civil Writ Jurisdiction Case No. 5406 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( ....
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....General (In Civil Writ Jurisdiction Case No. 11053 of 2022) For the Petitioner/s : Mr.Mohit Agarwal For the Respondent/s : Mr. Additional Solicitor General (In Civil Writ Jurisdiction Case No. 11828 of 2022) For the Petitioner/s : Mr.Naresh Chandra Verma For the Respondent/s : Mr. Additional Solicitor General (In Civil Writ Jurisdiction Case No. 12098 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad (Gp7) (In Civil Writ Jurisdiction Case No. 12368 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad (Gp7) (In Civil Writ Jurisdiction Case No. 12459 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 12479 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 12840 of 2022) For the Petitioner/s : Mr. Anurag Saurav For the Respondent/s : Mr. Additional Solicitor General (In Civil Writ Jurisdiction Case No. 13190 of 2022) ....
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.... Nayak For the Respondent/s : Mr.Raghwanand ( Ga 11 ) Mr. Pratik Kumar, AC to GA-11 (In Civil Writ Jurisdiction Case No. 9994 of 2023) For the Petitioner/s : Mr.Manju Jha For the Respondent/s : Mr. Additional Solicitor General C.A.V. JUDGMENT (PER: HONOURABLE MR. JUSTICE CHAKRADHARI SHARAN SINGH) Common challenge in the present batch of writ applications filed under Article 226 of the Constitution of India the petitioners is to the constitutional validity of Section 16(4) of the Central Goods and Services Tax Act ('CGST Act' in short) and Section 16(4) of the Bihar Goods and Services Tax Act, 2017 ('BGST Act' in short) which deny entitlement of Input Tax Credit (ITC) in respect of any invoice or debit note for supply of goods or services or both after due date of furnishing of returns under the respective Sections 39 of the said Acts, for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier; same being violative of Articles 14 and 300A of the Constitution of India. 2. Alternatively, the petitioners are seeking a declar....
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....year 2018-19, however, it filed its return in GSTR-3B for the period February 2019 and March 2019 on 23.10.2019 and 07.11.2019. The Assistant Commissioner of State Tax, Patna Central, Patna (Respondent No. 6) issued a show cause notice on 20.02.2020 under Section 73 of the BGST Act proposing to disallow ITC for the tax period February and March 2019 on the ground of late filing of return in Form GSTR-3B. It is mentioned in the said notice that ITC had wrongly been availed by the petitioner for the aforesaid period and accordingly the petitioner was asked to furnish reply with supporting documents as evidence in support of the claim, by the date mentioned therein. The said show cause notice, which has been brought on record by way of Annexure-2 to the writ petition, contains quantification of amount of tax, interest and penalty under the CGST/BGST Act for the months of February and March 2019. As a sequel to the said show cause notice, a similar show cause notice in Form GST DRC-01 was also issued by the Assistant Commissioner (Respondent No. 6) on the same date. The amount of tax with interest and penalty has been computed as Rs. 1,34,12,983/-. 8. The petitioner replied to the s....
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....urn, whichever is earlier. It is in that background that the petitioners have elected to question the constitutional validity of Section 16(4) of the CGST/BGST Act itself being violative of Articles 14 and 300A of the constitution of India. 12. Section 16 of the CGST Act reads thus :- "16. Eligibility and conditions for taking input tax credit.-(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,-- (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed; [(aa) the details of the invoice or debit note ....
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....ed. (4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier. [Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under subsection (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.] " 13. Sub-section (4) of Section 16 has since been amended by the Finance Act, 2022 with effect from 01.10.2022 whereby the words and figures "due date of furni....
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....r his argument he has relied on a Supreme Court's decision in case of Modern Dental College and Research Centre & Ors. vs. State of Madhya Pradesh & Ors. reported in (2016) 7 SCC 353. He has further submitted that disallowing ITC by invoking Section 16(4) of the CGST/BGST Act amounts to double taxation and, thus, violates the principle of taxation on value addition. He has argued that denial of ITC results in withholding of an amount which was paid as input tax by a purchaser and constitutes a source of tax once again, which is violative of Article 265 of the Constitution of India. He has also submitted that Section 16(4) of the CGST/BGST Act is confiscatory in nature, inasmuch as, denial of ITC is implied confiscation of property in the shape of financial benefit belonging to a registered person. He has argued that the said provision is violative of Articles 13 and 14 of the Constitution of India and it imposes unreasonable restriction on holding of property. Relying on Supreme Court's decision in the case of K.T. Moopil Nair vs. State of Kerala (AIR 1961 SC 552), he contends that right to create an input tax is an indefeasible right, as has been laid down by the Punjab & Haryana ....
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.... GST and because of its complexity a separate chapter has been provided by way of Chapter-V containing Sections 16 to 21 of the CGST/BGST Act. He submits that all the provisions under Section 16 are substantive in nature and do not in any manner conflict with any provision under Sections 39, 47 or 49(2) of the CGST/BGST Act. 18. Whether ITC per se is a vested right, the denial of which by operation of sub-section (4) of Section 16 of the CGST/ BGST Act would amount to infringement of the constitutional right under Article 300-A of the Constitution, is one of the primordial questions which requires consideration by this Court in the wake of the nature of challenge put by the petitioners to the validity of the aforesaid provision. Right to property under Article 300-A of the Constitution of India has been held to be a human right as also a constitutional right which cannot be taken away except in accordance with law. This legal proposition is unexceptionable. 19. Dealing with the expression 'deprive of his right of property' under Article 300-A of the Constitution of India the Supreme Court in case of Jilubhai Nanbhai Khachar & Ors. vs. State of Gujarat & Anr. reported ....
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....CC 670 which reads as under:- "15. Where, however, the words were clear, there is no obscurity, there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the court to innovate or take upon itself the task of amending or altering the statutory provisions. In that situation the judges should not proclaim that they are playing the role of a lawmaker merely for an exhibition of judicial valour. They have to remember that there is a line, though thin, which separates adjudication from legislation. That line should not be crossed or erased. This can be vouchsafed by "an alert recognition of the necessity not to cross it and instinctive, as well as trained reluctance to do so". (See Frankfurter "Some Reflections on the Reading of Statutes in 'Essays on Jurisprudence'", Columbia Law Review, p. 51.)" 21. We need also to remind ourselves that doctrine of reading down applies only when general words used in a statute or regulation should be construed in a particular manner so as to save its constitutionality. The doctrine of reading down, while construing a statute, has been lucidly laid down in case of BTC vs. Mazdoor Congress reported ....
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....s may be prescribed and, (b) in the manner specified in Section 49 23. Sub-section (2) of Section 16 is a non-obstante clause and clearly states that no registered person shall be entitled to the credit of input tax in respect of any supply of goods or services or both unless he fulfills the requirements and satisfies the existence of other conditions prescribed in Clauses (a) to (d) thereof. 24. Sub-section (3) of Section 16 contemplates yet another circumstance when ITC on tax component cannot be allowed, i.e., where the registered person has claimed depreciation on the tax component of cost of capital goods and plant and machinery under the provisions of the Income Tax Act, 1961. 25. Lastly comes the offending clause which is under challenge i.e. sub-section (4) of Section 16 of the CGST/BGST Act, which, in no unambiguous terms, provides that a registered person shall not be entitled to take ITC in respect of any invoice or debit note for supply of goods or services or both after 30th day of November (post amendment), following the end of financial year to which such invoices or debit note pertain or furnishing of the relevant annual return, whichever is earlie....
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.... used, inasmuch as it is indicative and descriptive of every possible interest which the party can have. The term property has a most extensive signification, and, according to its legal definition, consists in free use, enjoyment, and disposition by a person of all his acquisitions, without any control or diminution, save only by the laws of the land. In Dwarkadas Shrinivas case [1950 SCC 833 : 1950 SCR 869 : AIR 1951 SC 41] this Court gave extended meaning to the word property. Mines, minerals and quarries are property attracting Article 300-A. 28. Upon close reading of sub-section (1) of Section 16 of the CGST/ BGST Act, we are of the view that the provision under sub-section (4) of Section 16 is one of the conditions which makes a registered person entitled to take ITC and by no means sub-section (4) can be said to be violative of Article 300-A of the Constitution of India. 29. We are not convinced with the submissions advanced on behalf of the petitioners to read down the provision of sub-section (4) of Section 16 of the CGST/ BGST Act since we see neither any reason nor a necessity to do it. We have mentioned in the beginning, the situations which may require reading do....
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....preme Court had to consider the validity of Section 19(10) of the Tamil Nadu Value Added Tax Act, 2006. After having analysed the legal principles and the statutory provisions the Supreme Court, while upholding the constitutional validity of Section 19(20) of the Tamil Nadu Value Added Tax Act, 2006, held in paragraph 12 as under :- "12. It is a trite law that whenever concession is given by statute or notification, etc. the conditions thereof are to be strictly complied with in order to avail such concession. Thus, it is not the right of the "dealers" to get the benefit of ITC but it is a concession granted by virtue of Section 19. As a fortiori, conditions specified in Section 10 must be fulfilled. In that hue, we find that Section 10 makes original tax invoice relevant for the purpose of claiming tax. Therefore, under the scheme of the VAT Act, it is not permissible for the dealers to argue that the price as indicated in the tax invoice should not have been taken into consideration but the net purchase price after discount is to be the basis. If we were dealing with any other aspect dehors the issue of ITC as per Section 19 of the VAT Act, possibly the arguments of Mr B....