2023 (6) TMI 890 - HC - GST

Input Tax Credit - Restriction on availed ITC beyond the prescribed time limit u/s 16(4) - GST Audit u/s 65 - Maintainability of petition merely on apprehension - invocation of jurisdiction of this Court under Article 226 of the Constitution of India - Reversal of input tax credit - HELD THAT - In any event merely on apprehension and on any proposed action the Petition would certainly not maintainable, when the provisions of Central Goods and Services Tax Act, 2017 (CGST Act) categorically provides for a procedure for assessment. It is for the Assessing Officer that considering the facts and circumstances of the case that appropriate action has to be taken including issuance of Show Cause Notice. It is quite clear that the Petitioners are avoiding GST audit and have not responded to the request of the Department to submit the accounts and have filed the present Petition. Admittedly, no Show Cause Notice also been issued. In the facts and circumstances of the present case, Petitioners does not warrant any interim order to be passed. Prayer for interim relief accordingly cannot be entertained - As the vires of the provisions of Section 16(4) of the CGST Act has been challenged by the Petitioners, on the earlier occasion a coordinate Bench by this Court had issued notice to the Attorney General of India. However, it prima facie appears that the adjudication on such prayers itself is academic in the present Petition. Accordingly, list the Petition to be heard on 21st July, 2023.

Summary

Issues:
The issues involved in the judgment are the denial of interim relief to the Petitioners based on apprehension, the contention regarding reversal of Input Tax Credit (ITC), the lack of response to audit requests, and the challenge to the vires of Section 16(4) of the CGST Act.

Interim Relief Denial:
The Court refused to grant interim relief to the Petitioners as they approached the Court based solely on apprehension. The Petitioners claimed they were pressured to reverse the ITC for February-2019 and March-2019, but the Respondents denied making any such communication. The Court noted that the Petitioners had not responded to audit requests and had not submitted required documents despite being granted time. It was emphasized that the provisions of the CGST Act provide a procedure for assessment by the Assessing Officer, including the issuance of a Show Cause Notice. The Court found that the Petitioners' avoidance of GST audit and the lack of a Show Cause Notice did not warrant any interim relief.

Challenge to Viability of Section 16(4) of CGST Act:
The Petitioners had challenged the vires of Section 16(4) of the CGST Act. A previous Bench had issued notice to the Attorney General of India regarding this challenge. However, the Court noted that adjudication on such prayers seemed academic in the present Petition. The matter was listed for further hearing on a specified date, with the Respondents given liberty to file appropriate Affidavits raising objections on all issues.