2024 (9) TMI 1230 - HC - GST

Imposition of time limit for availment of Input Tax Credit - violative of Article 14, Article 19 (1) (g) and Article 300A of the Constitution of India - HELD THAT - It is evident that the insertion of the aforesaid provision has been made effective from the 1st day of July, 2017, whereby and whereunder, it has been provided that Notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed upto the thirtieth day of November, 2021 . It is, thus, evident that the decision which has been taken as impugned in the present writ petition was in absence of the consideration by following the stipulation made in sub-section (5) of Section 16 which has been made effective w.e.f. 1st day of July, 2017. Considering the implication of insertion of sub-section (5) under Section 16 of the CGST Act, this Court is of the view that the matter needs to be considered afresh - the matter is remitted before the authority to pass afresh order taking into consideration the implication of sub-section (5) of Section 16 of the CGST Act.

Summary

Issues:
Challenge to the validity of Section 16(4) of Jharkhand Goods and Services Tax Act, 2017 and Rule 61(5) of Jharkhand Goods and Services Rules, 2017. Impugned order disallowing input tax credit under Section 16(4) read with Rules 36 of Central/Jharkhand Goods and Services Tax Act/Rules, 2017. Request for quashing the impugned order dated 15 July 2023.

Analysis:
The petitioner filed a writ petition under Article 226 of the Constitution of India seeking various reliefs. The first relief challenged the validity of Section 16(4) of Jharkhand Goods and Services Tax Act, 2017, alleging it violated constitutional provisions and the basic structure of the Act. The second relief challenged the amendment under Rule 61(5) of Jharkhand Goods and Services Rules, 2017, as ultra vires, affecting the petitioner's right to avail Input Tax Credit. The third relief sought quashing of the impugned order dated 15 July 2023, disallowing input tax credit, alleging violation of constitutional rights and principles of natural justice.

The matter was heard on 27.08.2024, where the petitioner's counsel argued for a fresh decision based on Section 118 of the Finance Act, 2024. The respondent sought time for instructions, and the matter was listed for further hearing. The respondent's counsel later requested an adjournment to seek instructions regarding quashing the impugned order in light of Section 118 of the Finance Act, 2024. The State counsel confirmed the need for fresh adjudication due to the provisions of the Finance Act, 2024.

The court noted the insertion of sub-section (5) under Section 16 of the CGST Act, effective from 1st July 2017, allowing input tax credit for specified financial years. The court observed that the impugned decision did not consider the implications of this new provision. Consequently, the State agreed to reexamine the issue. The court quashed the impugned order dated 15.07.2023 and remitted the matter for a fresh decision in light of sub-section (5) of Section 16 of the CGST Act, directing the authority to decide within two months.

The court clarified that it did not delve into the merits of the case but emphasized the need for a fresh consideration based on the new statutory provision.