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2020 (12) TMI 896 - HC - GSTValidity of Sub-rule (4) of the Rule 36 of the GST Rules - It is argued that the Subrule (4) of the Rule 36 of the Rules speaks to restrict the ITC to a buyer of goods of services on the basis of the details of the outward supply furnished by the supplier of the services of goods or on the basis of the common portal - HELD THAT - Let Notice be issued to the respondents, returnable on 12.02.2021. The respondents shall be served by email over and above the regular service through the Court. Application disposed off.
Issues:
Challenge to the validity of Sub-rule (4) of Rule 36 of GST Rules on the ground of violation of Article 14 of the Constitution. Analysis: The judgment delivered by the Gujarat High Court involved a challenge to the validity of Sub-rule (4) of Rule 36 of the GST Rules on the basis of it being violative of Article 14 of the Constitution. The contention put forth was that the rule restricts the Input Tax Credit (ITC) to a buyer of goods or services based on the details provided by the supplier on the common portal. The argument presented was that this rule imposes an onerous burden on the buyer to ensure that the supplier uploads the necessary details and places the ITC at risk if the supplier fails to comply. It was asserted that this rule is arbitrary, irrational, and against the scheme of the Act, thus violating Article 14 of the Constitution. The counsel for the writ applicants also cited relevant Supreme Court decisions to support their arguments. The High Court, after hearing the arguments, decided to issue a Notice to the respondents, returnable on a specified date. The mode of service was directed to be through email in addition to the regular service through the Court. This procedural step indicates that the Court is willing to hear the respondents' side of the case before making a final decision on the matter. Additionally, the connected civil application was disposed of in view of the order passed on the main issue regarding the validity of Sub-rule (4) of Rule 36 of the GST Rules. The disposal of the connected application suggests that the Court considered the primary challenge as the central issue requiring resolution. In conclusion, the judgment by the Gujarat High Court addressed the challenge to the validity of a specific rule under the GST framework, focusing on the implications for Input Tax Credit and its alignment with constitutional provisions. The decision to issue a Notice to the respondents and the disposal of the connected application indicate the procedural progression of the case towards a comprehensive resolution of the legal issues raised by the writ applicants.
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