2024 (11) TMI 656 - HC - GST

Constitutional Validity of Section 16 (4) of the CGST and KGST Act, 2017 - violative of Article 14, 19 (1) (g) and 300A of the Constitution of India or not - HELD THAT - A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in the case of M/s. Sadhana Enviro Engineering Services vs. Joint Commissioner of Central Tax others 2024 (9) TMI 1648 - KARNATAKA HIGH COURT where it was held that 'In view of the amendment by inserting Section 16(5) to the CGST / KGST Act, the present petition deserves to be disposed of relegating the parties to the original authority to implement and give effect to the said provisions after providing sufficient and reasonable opportunity to the petitioner and hearing them and proceed further in accordance with law and by issuing certain directions in this regard.' In view of the aforesaid facts and circumstances and the judgment of this Court in M/s. Sadhana Enviro Engineering s case, the present petition also deserves to be allowed and disposed of in terms of the said judgment.

Summary

Issues:
Challenge to Order-in-Appeal under GST Act, 2017, Declaration of Section 16(4) as unconstitutional, Relief sought from the Court.

Analysis:
The petitioner sought a writ to quash an Order-in-Appeal and declare Section 16(4) of the CGST and KGST Act, 2017 unconstitutional. The Court considered the issue covered by a previous judgment and examined a new provision, Section 16(5), inserted by "The Finance (No. 2) Act, 2024," extending the time limit for availing credit. The petitioner argued for the implementation of this new provision, enabling them to claim credit until 30.11.2021 for specific financial years. The respondents agreed on the applicability of Section 16(5) and assured necessary notifications would be issued. The Court acknowledged the insertion of Section 16(5) and directed parties to original authority for implementation, providing a reasonable opportunity for the petitioner. The impugned blocking of Input Tax Credit ledger was quashed, and respondents were instructed to unblock and release the credit balance promptly.

The Court disposed of the petition in line with the previous judgment and allowed the petition, quashing the impugned Orders and directing parties to the show cause notice stage. The respondents were directed to implement Section 16(5) by providing a reasonable opportunity for the petitioner within a month. The Court kept all other contentions open for future consideration and expressed no opinion on those matters. The judgment was in favor of the petitioner, granting relief in accordance with the law and the newly inserted provision, Section 16(5) of the CGST and KGST Act, 2017.