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TMI Blog2023 (9) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Civil Writ Jurisdiction Case No. 5636 of 2021) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K. N. Singh ( Asg ) (In Civil Writ Jurisdiction Case No. 5747 of 2021) For the Petitioner/s : Mr. Anurag Saurav For the Respondent/s : Mr. Dr. K. N. Singh ( Asg ) (In Civil Writ Jurisdiction Case No. 6627 of 2021) For the Petitioner/s : Mr. Gautam Kumar Kejriwal For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Civil Writ Jurisdiction Case No. 6630 of 2021) For the Petitioner/s : Mr. Gautam Kumar Kejriwal For the Respondent/s : Mr. Dr. K. N. Singh ( Asg ) (In Civil Writ Jurisdiction Case No. 6638 of 2021) For the Petitioner/s : Mr. Gautam Kumar Kejriwal For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Civil Writ Jurisdiction Case No. 7478 of 2021) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Civil Writ Jurisdiction Case No. 7666 of 2021) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K.N. Singh (Asg) (In Civil Writ Jurisdiction Case No. 7745 of 2021) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s : Mr. Dr. Krishna Nandan Singh (Asg) (In Civil Writ Jurisdiction Case No. 1853 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar (SC 11) (In Civil Writ Jurisdiction Case No. 1860 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar (SC 11) (In Civil Writ Jurisdiction Case No. 1867 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar (SC 11) (In Civil Writ Jurisdiction Case No. 1890 of 2022) Mr. Archana Sinha @ Archana Shahi Mr. Vikash Kumar (Sc 11) (In Civil Writ Jurisdiction Case No. 2200 of 2022) For the Petitioner/s : Mr.Vikas Kumar For the Respondent/s : Mr. Vikash Kumar (Sc 11) (In Civil Writ Jurisdiction Case No. 2347 of 2022) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K. N. Singh (Asg ) (In Civil Writ Jurisdiction Case No. 2408 of 2022) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K.N.Singh (Asg) (In Civil Writ Jurisdiction Case No. 2490 of 2022) For the Petitioner/s : Mr. D.V. Pathy For the Respondent/s : Mr. Dr. K. N. Singh ( Asg) (In Civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ( Sc 11 ) (In Civil Writ Jurisdiction Case No. 5161 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 5162 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar ( Sc 11 ) (In Civil Writ Jurisdiction Case No. 5246 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar ( Sc 11 ) (In Civil Writ Jurisdiction Case No. 5304 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr. Vikash Kumar ( Sc 11 ) (In Civil Writ Jurisdiction Case No. 5406 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 5408 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 5701 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 5703 of 2022) For the Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Writ Jurisdiction Case No. 12368 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad (Gp7) (In Civil Writ Jurisdiction Case No. 12459 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 12479 of 2022) For the Petitioner/s : Mr. Archana Sinha @ Archana Shahi For the Respondent/s : Mr.Vivek Prasad ( Gp 7 ) (In Civil Writ Jurisdiction Case No. 12840 of 2022) For the Petitioner/s : Mr. Anurag Saurav For the Respondent/s : Mr. Additional Solicitor General (In Civil Writ Jurisdiction Case No. 13190 of 2022) For the Petitioner/s : Mr.Satish Chandra Jha 3 For the Respondent/s : Mr. Additional Solicitor General (In Civil Writ Jurisdiction Case No. 13518 of 2022) For the Petitioner/s : Mr.Abhay Kumar Thakur For the Respondent/s : Mr. Additional Solicitor General (In Civil Writ Jurisdiction Case No. 13521 of 2022) For the Petitioner/s : Mr.Satish Chandra Jha 3 For the Respondent/s : Mr. Additional Solicitor General (In Civil Writ Jurisdiction Case No. 13687 of 2022) For the Petitioner/s : Mr.Sriram Krishna For the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct' in short) which deny entitlement of Input Tax Credit (ITC) in respect of any invoice or debit note for supply of goods or services or both after due date of furnishing of returns under the respective Sections 39 of the said Acts, for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier; same being violative of Articles 14 and 300A of the Constitution of India. 2. Alternatively, the petitioners are seeking a declaration that the conditions as prescribed in Section 16(4) of the CGST/BGST Act are merely procedural in nature and cannot override the substantive conditions for availing ITC prescribed under Section 16(1) and Section 16(2) of the said Acts. It is their case that because of the non-obstante clause in Section 16(2) of the CGST/BGST Act, the same shall prevail over Section 16(4) of the Act. Yet another alternative argument has been made on behalf of the petitioners that by reading down the provisions under Section 16(4) of the CGST/BGST Act, this Court should declare that the embargo in the said provision would apply only to restri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date mentioned therein. The said show cause notice, which has been brought on record by way of Annexure-2 to the writ petition, contains quantification of amount of tax, interest and penalty under the CGST/BGST Act for the months of February and March 2019. As a sequel to the said show cause notice, a similar show cause notice in Form GST DRC-01 was also issued by the Assistant Commissioner (Respondent No. 6) on the same date. The amount of tax with interest and penalty has been computed as Rs. 1,34,12,983/-. 8. The petitioner replied to the said show cause notice by filing a written submission asserting that the disallowance of ITC in terms of Section 16(4) of the Act was not justified. The petitioner also claimed that it had filed its return in the prescribed Form GSTR-3B and had made necessary disclosures both in respect of inward and outward supply and also paid tax by way of ITC. Respondent No. 6, however, passed an order under Section 73 of the CGST/BGST Act holding the petitioner liable to pay a sum of Rs. 1,34,12,983/- on the ground that during the perusal of the return in GSTR-3B it was found that the petitioner had availed ITC for the tax period February 2019 and March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,-- (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed; [(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;] (b) he has received the goods or services or both. [Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services-- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under subsection (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.] " 13. Sub-section (4) of Section 16 has since been amended by the Finance Act, 2022 with effect from 01.10.2022 whereby the words and figures "due date of furnishing of the return under Section 39 for the month of September" stand substituted by "30th day of November". 14. Mr. D.V. Pathy, learned counsel appearing on behalf of the petitioners has submitted that refusal to allow ITC under Section 16(4) of the Act beyond the date contemplated therein is confiscatory in nature. He submits that ITC is a vested right under Article 300A of the Constitution of India and such protected and vested right cannot lightly be taken away on the ground of belated filing of return. He has made an alternative submission that Section 16(4) of the CGST/BGST Act may be read down by this Court and it may be held that the embargo in the said provision would apply only to restrict claim of ITC in respect of only such invoices or debit note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belonging to a registered person. He has argued that the said provision is violative of Articles 13 and 14 of the Constitution of India and it imposes unreasonable restriction on holding of property. Relying on Supreme Court's decision in the case of K.T. Moopil Nair vs. State of Kerala (AIR 1961 SC 552), he contends that right to create an input tax is an indefeasible right, as has been laid down by the Punjab & Haryana High Court in case of Apfert Technologies Pvt. Ltd. vs. Union of India and others, which has been affirmed by the Supreme Court. 16. Mr. P. K. Shahi, learned Advocate General representing the State of Bihar has submitted that the challenge of the petitioners to the constitutional validity of Section 16(4) of the Act, being violative of Article 14 of the Constitution of India, is thoroughly misconceived. He has argued that ITC is in the nature of benefit/ concession extended to a registered person under the CGST/BGST Act which can be availed only as per the scheme of the CGST/BGST Act. He has submitted that the statutory scheme under Section 16 of the CGST/BGST Act with restriction available under sub-section (4) thereof has uniform application and cannot be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Constitution of India has been held to be a human right as also a constitutional right which cannot be taken away except in accordance with law. This legal proposition is unexceptionable. 19. Dealing with the expression 'deprive of his right of property' under Article 300-A of the Constitution of India the Supreme Court in case of Jilubhai Nanbhai Khachar & Ors. vs. State of Gujarat & Anr. reported in 1995 Supp (1) SCC 596 has noted that the property in legal sense means an aggregate of rights which are guaranteed and protected by law. It extends to every species of valuable right and interest, more particularly, ownership and exclusive right to a thing, the right to dispose of the thing in every legal way, to possess it, to use it, and to exclude everyone else from interfering with it. The dominion or indefinite right of use or disposition which one may lawfully exercise over particular things or subjects is called 'property'. The exclusive right of possessing, enjoying, and disposing of a thing is property in legal parameters and the word 'property' connotes everything which is subject of ownership, corporeal or incorporeal, tangible or intangible, visible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes in 'Essays on Jurisprudence'", Columbia Law Review, p. 51.)" 21. We need also to remind ourselves that doctrine of reading down applies only when general words used in a statute or regulation should be construed in a particular manner so as to save its constitutionality. The doctrine of reading down, while construing a statute, has been lucidly laid down in case of BTC vs. Mazdoor Congress reported in 1991 Supp (1) SCC 600, paragraph 255 of which reads as under :- "255. It is thus clear that the doctrine of reading down or of recasting the statute can be applied in limited situations. It is essentially used, firstly, for saving a statute from being struck down on account of its unconstitutionality. It is an extension of the principle that when two interpretations are possible - one rendering it constitutional and the other making it unconstitutional, the former should be preferred. The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its violation of any of the provisions of the Constitution. The second situation which summons its aid is where the provisions of the statute are vague and ambiguous and it is possible t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST Act, which, in no unambiguous terms, provides that a registered person shall not be entitled to take ITC in respect of any invoice or debit note for supply of goods or services or both after 30th day of November (post amendment), following the end of financial year to which such invoices or debit note pertain or furnishing of the relevant annual return, whichever is earlier. The language of Section 16 of the CGST/BGST Act suffers from no ambiguity and clearly stipulates grant of ITC subject to the conditions and restrictions put thereunder. 26. At the cost of repetition, we note here that ITC is not unconditional and a registered person becomes entitled to ITC only if the requisite conditions stipulated therein are fulfilled and the restrictions contemplated under sub-section (2) of Section 16 do not apply. One of the conditions to make a registered person entitled to take ITC is prescribed under sub-section (4) of Section 16. The right of a registered person to take ITC under sub-section (1) of Section 16 of the Act becomes a vested right only if the conditions to take it are fulfilled, free of restrictions prescribed under sub-section (2) thereof. In order to invoke Article 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 300-A of the Constitution of India. 29. We are not convinced with the submissions advanced on behalf of the petitioners to read down the provision of sub-section (4) of Section 16 of the CGST/ BGST Act since we see neither any reason nor a necessity to do it. We have mentioned in the beginning, the situations which may require reading down a statutory provision. There is always a presumption of constitutional validity of a legislation, with the burden of showing the contrary, lying heavily upon someone who challenges its validity. 30. Submissions have been advanced on behalf of the petitioners that sub-section (4) of Section 16 imposes unreasonable and disproportionate restriction on the right to freedom of trade and profession guaranteed under Article 19(1)(g) of the Constitution and is, therefore, violative of Article 302 of the Constitution and is in teeth of Article 13 of the Constitution. This argument is founded on the ground of absence of any rationale behind fixation of a cut-off-date for filing of return. We do not find any merit in the submissions so advanced, which deserves to be outrightly rejected. 31. Fiscal legislation having uniform application to all re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not permissible for the dealers to argue that the price as indicated in the tax invoice should not have been taken into consideration but the net purchase price after discount is to be the basis. If we were dealing with any other aspect dehors the issue of ITC as per Section 19 of the VAT Act, possibly the arguments of Mr Bagaria would have assumed some relevance. But, keeping in view the scope of the issue, such a plea is not admissible having regard to the plain language of sections of the VAT Act, read along with other provisions of the said Act as referred to above." 35. Relying on the said decision, in case of Jayam and Company (supra), the Supreme Court in case of ALD Automotive Private Limited (supra) upheld the constitutional validity of Section 19(11) of Tamil Nadu Value Added Tax Act, 2006 with a clear finding that the said provision neither can be said to be arbitrary nor violative of the right guaranteed to a dealer under Article 19(1)(g) of the Constitution. 36. Submission has been made, though feebly, on behalf of the petitioners that this Court may declare the requirement of sub-section (4) of Section 16 as directory and not mandatory. The said submission is not at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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