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2019 (8) TMI 813 - HC - GSTGrant of the refund of the unutilized tax credit in respect of the tax paid on input services - Vires of Rule 89(5) of the Central Goods and Services Tax Rules, 2017 - HELD THAT - Issue Notice returnable on 21/08/2019 .
Issues involved: Challenge to Rule 89(5) of Central Goods and Services Tax Rules, 2017 denying refund of unutilized tax credit on input services.
Analysis: 1. Nature of Challenge to Rule 89(5): The petition challenges Rule 89(5) of the Central Goods and Services Tax Rules, 2017, as amended, which denies the refund of unutilized tax credit on input services. The challenge is based on the grounds that the amended rule is ultra vires to the Constitution of India and the provisions of the Central Goods and Services Tax Act, 2017. The argument is supported by references to Sections 53 and 54 of the Act, along with definitions of "input," "input services," "input tax," and "input tax credit" under Sections 2(59), (60), (62), and (63) respectively. 2. Contentions and Amendments: The contention raised is that the impugned amended Rule 89(5) hinders the benefit of refund on unutilized input tax credit. Despite acknowledging the power to amend rules retrospectively, the challenge is centered on the denial of this benefit. The rule was amended through Notification No.21/2018 dated 18.4.2018 and Notification No.26/2018 dated 13.6.2018. The argument emphasizes the importance of the refund provisions and the impact of the amendment on taxpayers. 3. Court's Decision: After considering the arguments presented, the Court is inclined to issue a Notice returnable on 21/08/2019. The case is to be tagged along with other related Special Civil Applications. This decision indicates that the Court finds merit in the challenge raised against Rule 89(5) and deems it necessary to proceed with the case further. This detailed analysis highlights the core issues involved in the legal judgment, focusing on the challenge to Rule 89(5) of the Central Goods and Services Tax Rules, 2017, and the subsequent decision of the Court to issue a Notice for further proceedings.
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