2019 (1) TMI 358 - HC - GST

Vires of Notification No. 5/2017 - lapsing of the input tax credit - the notification ultra-vires subsection (3) of section 54 of Central Goods and Services Tax Act or not? - Held that - Issue Notice returnable on 18th January, 2019. By way of ad-interim relief, the petitioner is permitted to reverse the input tax credit subject to the final outcome of the petition.

Summary

Issues involved:
Challenge to the validity of a notification under the Central Goods and Services Tax Act, 2017 regarding lapsing of input tax credit accumulated on supplies received after a specified date.

Analysis:
The petitioner challenged the validity of a notification issued by the Central Government regarding the lapsing of input tax credit accumulated on supplies received after a specific date. The petitioner argued that the notification was ultra-vires subsection (3) of Section 54 of the Central Goods and Services Tax Act, 2017. The petitioner contended that while the Act empowers the Government to notify goods for which certain provisions would not apply, it does not authorize the lapsing of input tax credit. The petitioner highlighted that the impugned notification amended a previous notification and specified goods for which accumulated input tax credit would lapse if not utilized by a certain date. The petitioner sought a refund without being required to reverse the input tax credit received up to a specified date.

The Court, after considering the submissions made by the petitioner's advocate, issued a notice returnable on a specified date. The Court granted ad-interim relief to the petitioner, allowing them to reverse the input tax credit subject to the final outcome of the petition. The Court also directed the petition to be heard with another related application. Additionally, the Court permitted direct service to specific respondents involved in the case.

This judgment reflects a legal challenge to a notification under the Central Goods and Services Tax Act, 2017, concerning the lapsing of accumulated input tax credit on certain supplies received after a designated date. The petitioner's argument centered around the lack of authority for the Government to provide for the lapsing of input tax credit under the relevant section of the Act. The Court's decision to issue a notice and grant interim relief indicates a preliminary acceptance of the petitioner's contentions, setting the stage for further legal proceedings to determine the validity of the impugned notification.