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TMI Blog2024 (11) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... f Respondent No. 3 60 - 66 F Submission on behalf of Respondent No. 1 67 G Submissions on behalf of Respondent No. 2 68 - 72 H Rejoinder Submission on behalf of the petitioner 73 - 75 I Discussion and Conclusion. 76 - 127 1. Rule, made returnable forthwith. Respondents waive service. By consent of the parties, heard finally. A. Introduction :- 2. The petitioner a consortium of two entities was awarded a contract by the Mumbai Metropolitan Development Authority (MMRDA) a project of public importance, namely the "Mumbai Trans Harbour Link Project", which involved construction of the longest bridge of 22 kms on the ocean connecting South Mumbai and Nhava-Sheva in Navi Mumbai. It is under such contract disputes have arisen on the application of the provisions of the Central Goods and Services Tax Act, 2017 (for short "CGST Act") as also the corresponding provisions of the Maharashtra Goods and Services Tax Act, 2017(for short "MGST Act") inter alia in regard to the petitioner's claim in regard to the input tax credit being not granted to the petitioner qua the advance amounts received by the petitioner from the MMRDA as per the terms of the contract and remitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two entities, namely, Larsen and Toubro Ltd. (L&T) and IHI Infrastructure Systems Co. Ltd., Japan (IHI). On 4 January, 2017, the Mumbai Metropolitan Region Development Authority (for short "MMRDA") invited tender for procurement and construction of a bridge for the "Mumbai Trans Harbour Link (MTHL) Project" (for short "the project"). The project was being funded by the Japan International Co-operative Agency. The petitioner was formed as an unincorporated consortium of L&T & IHI, "solely to bid for" and if successful, execute the project. The petitioner was a successful bidder. A letter of acceptance was issued to the petitioner by MMRDA on 17 November, 2017. A Consortium Agreement dated 22 December, 2017 was entered into between L&T and IHI. Thereafter, a Contract Agreement dated 26 December, 2017 was entered between MMRDA and petitioner. 5. The petitioner, as also the consortium members of the petitioner obtained registration under the GST laws, in compliance with the GST provisions. For the execution of the project work, purchase orders dated 23 March, 2018, back-to-back with the Contract Agreement, were issued by the petitioner to its members, i.e., L&T and IHI. The members of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of execution of the contract. 9. The petitioner contends that on receipt of such advance, the petitioner in turn remitted the said amounts to its constituent L&T together with GST of Rs. 32.02 crores. L&T thereupon issued a "Receipt Voucher (RV)" dated 28 March, 2018 indicating the amount received and the GST. Under the contract, such sequence was repeated for the next tranche of advance/loan granted to the petitioner by the MMRDA, this time an amount Rs.32.62 crores (approx) was disbursed to the petitioner in September 2018 and the same was transferred to the petitioner's constituent L&T. Such amount of Rs.32.62 crores was treated, accounted and remitted to the GST Department similar to the first tranche, Receipt Vouchers were issued by the petitioner to MMRDA and by L&T to the petitioner. 10. On the aforesaid backdrop, the case of the petitioner is that the petitioner was precluded from availing of the Input Tax Credit (ITC) of the GST paid to L&T (its constituent) for the reason that Section 16 (2) (b) of the CGST and MGST Act provided that no ITC could be taken unless the service had been received. The petitioner contends that at such point of time, the work under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uents. However, the petitioner is precluded from taking credit of this tax amount reimbursed by it, as a result, it ends up with an additional cash flow of Rs.10 crores thereby resulting in the government receiving tax on 110% of the contract value of Rs. 1000 crores. 14. In such circumstances the petitioner has contended that the government thus collects Rs. 110 crores as tax, while plainly only Rs.100 crores ought to have been collectible, being GST of 10% on the contract value of Rs.1000 crores. This, according to the petitioner, is due to the said arbitrary provisions of the GST Acts. 15. The petitioner contends that what is more concerning is the refund of unutilized input tax credit of Rs.10 crores, which becomes available once project work commences and which remains unutilized even after completion of the project, being denied to the petitioner by virtue of the proviso to Section 54 (3) of the CGST Act, since refund of unutilized ITC is restricted only to two situations mentioned in the proviso, i.e. (i) zero-rated supplies made without payment of tax; (ii) inverted duty structure, i.e., where the rate of tax on inputs (goods) is more than the rate of tax on output suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 16 (2) (b) of the CGST Act, and provisions of section 16 (2) (b) of the MGST Act as being contrary to the provisions of section 13 (2) and the Explanation thereto of the CGST Act and to provisions of Section 13 (2) and the Explanation thereto of the MGST Act, respectively, and as being arbitrary, unreasonable, discriminatory and violative of the provisions of Articles 14, 19 (1) (g), 265 and 300A of the Constitution of India; d. in the nature of a Writ of declaration, declaring that input tax credit may be availed under section 16 of the CGST Act, and under section 16 of the MGST Act, on the basis of a receipt voucher issued under Section 31 (3) (d) of the CGST Act and section 31 (3) (d) of the MGST Act respectively, notwithstanding the non-inclusion of receipt voucher under Rule 36 of the CGST Rules, 2017 and under Rule 36 of the MGST Rules, 2017 respectively; e. in the nature of a Writ of declaration, declaring the proviso to section 54 (3) of the CGST Act, and the proviso to section 54 (3) of the MGST Act, as being arbitrary, unreasonable and violative of the provisions of Articles 14, 19 (1) (g), 265 and 300A of the Constitution of India; f. Writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to the Government, shall forthwith pay the said amount to the Government, irrespective of whether the supplies in respect of which such amount was collected are taxable or not'. 19. It is hence contended that if the amount received by the petitioner was loan as claimed by the petitioner, in that case there would be no taxable service as 'loan' is not included in definition of 'services' under clause 102 of Section 2 of the CGST Act. In such event, such activity would not qualify as "input services" for the Company. It is contended that for such reason, the petitioner would not be eligible to take Input Tax Credit on the amount of GST paid by it to L&T. It is next contended that in case, if such activity was loan as claimed by the petitioner i.e. non-taxable service, then the provisions of Sections 7, 12, 13, 16 and 54 of the CGST Act read with Rule 36 of the CGST Rules are not applicable in the present facts. 20. In dealing with the grounds as raised in the writ petition, it is contended that part of the provisions of Section 7 in so far as it relates to services 'agreed to be made' cannot be considered as ultra vires Article 246A read with Article 366 (12A) of the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... next contended that the amount which was claimed as refund was paid in cash against output liability on advances received and that there was no cash balance at the end of December, 2018, thus, the reasons mentioned in the refund application that the petitioner has paid GST on the advance received, on which the joint venture partner-Larson & Toubro has also paid GST, which tantamounts to excess payment of GST to the Government is not a tenable proposition. It is lastly contended that the upfront amounts received by the petitioner from the MMRDA were advance for mobilization and not loan and hence, were clearly hit by the provisions of Section 76 (1) of the CGST Act. It is contended that if such activity was loan as claimed by the petitioner, then there would be no taxable service, for the reason that 'loan' is not included in definition of 'services' under clause 102 of Section 2 of the CGST Act. In such event, the activity would not qualify as "input services" for the petitioner. It is stated that for such reasons, the petitioner would not be eligible to take Input Tax Credit on the amount of GST paid by the company to M/s. Larsen & Toubro Ltd. on the said activity. Further, in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he combined effect of Section 7 and Section 13 is that the supply includes agreement to supply but tax is not levied on such agreement but on receipt of payment under the Contract as provided under Section 13 of the GST Act. Hence, there is no lack of authority or competence on levy of tax on receipt of payment under an agreement to supply. 25. Insofar as the petitioner's case that Clause 14.2 of the Contract Agreement uses the word "Loan", it is contended that it is essentially advance payment for adjustment against the future running bills. It is stated that in any event it is well settled that nomenclature of transactions is not relevant and it is to be construed on the nature of transaction. 26. Insofar as the case of the petitioner on refund is concerned, it is contended that the petitioner has already availed of a remedy of making a refund application, which has been rejected and against which an appeal is filed which is pending before the Appellate Authority. 27. It is next contended that this is a case where MMRDA has paid advance money along with tax to the petitioner. Therefore, the tax element included in such advance payment amounts to collection of tax and would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be payable on the same and refund would be due is the case before the statutory authorities, earlier in adjudication and now in appeal. It is contended that the petitioner's case in these Writ Petitions is the challenge to the above provisions, and that even if the payment were to be construed as an advance, no tax can be constitutionally collected on the same, that is, without the happening of the taxable event. In the alternative, it is contended that where the taxable event is treated as having happened by way of statutory fiction, then such fiction cannot be arbitrarily curtailed, but has to be given its full effect upon which ITC would be available immediately upon the tax being remitted on the advance, notwithstanding the non-inclusion of receipt voucher by the rule-making authority under Rule 36 of the CGST Rules. It is contended that the tax on supply cannot be imposed where the supply is yet to take place. Further it is contended that payment of mobilization advance is not the taxable event contemplated in the Constitution. 30. It is next contended that interestingly the respondents refer to taxpayers as "subjects", an monarchical anachronism in a constitutional de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issues which are itself created by the legislation. It is therefore contended that it is no answer to the challenge to the constitutionality to say that Section 54 (3) caters only to two situations. 33. It is next contended that where there is no definition of "supply", the legislature is bound by the ordinary meaning of the word and cannot seek to enlarge the definition by creating a fiction. It is also contended that the Constitution enables levy of tax on "supply of services" and not on "receipt of payment". In other words, the taxable event is the supply and not receipt of payment. It is contended that it is not permissible for the legislature to alter the taxable event. 34. It is next contended that the respondent ought not to conflate between the wording of the provisions, the constitutionality of which is challenged by the petitioner and as to how the provision would be required to be interpreted. It is contended that the question whether the payment is an advance or a loan falls for consideration under the statutory proceedings and the issues as raised in this writ petition are de hors the 'advance versus loan' issue. It is contended that in other words, be it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcentage of the contract amount and since the contract amount is inclusive of tax, the amount received towards loan, was inclusive of tax, and therefore, the GST had to be 'back-worked'. It is contended that subsequently, when the petitioner came to understand that the loans did not fall within the GST net at all, refund applications were made. It is stated that this upfront loan, including the GST thereon, is to be recovered by MMRDA from the stage-wise payments and thus there is no question of unjust enrichment of the petitioner. It is next stated that the petitioner, by abundant caution, has also issued credit notes to MMRDA with regard to the GST portion. It is stated that in any case, the fact that GST was paid voluntarily cannot be put against the petitioner. As the issue is whether in law, the respondents are entitled to levy GST on the loan amount received by the petitioner from MMRDA. 37. It is next contended that the omission to include receipt voucher under Rule 36 of the CGST Rules as a document based on which ITC may be availed is bad in law, when Section 16 (2) (b) is to be read harmoniously with Section 13 (2) and the Explanation thereto, that the goods/serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of tax results in excess payment of tax has been explained by the petitioner in its pleadings. It is contended that even if ITC was substantively available upon payment of tax, its benefit could not be taken because of a procedural roadblock in Rule 36 of the CGST Rules, i.e. ITC could be taken only based on invoice and not based on a 'receipt voucher' which is the document required to be issued for advance payments. The constitutionality of the same is challenged by the petitioner. 40. It is next contended that since ITC was denied at the relevant time, it results in accumulation of ITC. However, Section 54 precludes refund of such accumulated ITC. Hence, the constitutionality of the relevant portion of Section 54 too is challenged. In conclusion, it is contended that the Writ Petition challenges the constitutional validity of the provisions of CGST/MGST Act and Rules and seeks refund of the tax collected without authority of law. Hence, it cannot by any means be contended that the Writ Petition or any one of the prayers have become infructuous. It is, therefore, contended that the petition necessarily requires adjudication. Second Clarificatory Affidavit on behalf of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application has been filed. For such reason, there is no question of the Writ Petition becoming infructuous. 42. In regard to the issue regarding taking/utilization of ITC, without prejudice to its contentions on the constitutionality of the provisions of GST as assailed, it is the petitioner's case that the petitioner invoices and receives payments from MMRDA for the MTHL project. For the execution of the project, the petitioner has a back-to-back agreement with its constituents (M/s L&T Ltd, India and M/s IHI Infrastructure Systems Co Ltd, Japan). Thus, whatever payment + GST the petitioner receives from MMRDA (including loans/advances) is made over to the petitioner's constituents. Therefore, whatever GST is paid as input tax to the constituents is available as ITC and matches with, and is utilisable for, the payment of the petitioner's output tax obligations. It is contended that in the matter of the loan/ advance, the petitioner could not take ITC of the input GST paid to its constituents since no work was done owing to Section 16 (2) (b) of the CGST Act, 2017. Therefore, the output GST on the loan/ advance received from MMRDA had to be remitted in cash. It is further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yer for the reason that if the output tax is not so reduced, while the ITC becomes fully utilisable against such full output tax, this results in excess output tax having been paid, thus the claim of the petitioner for refund. Further, if the output tax is reduced proportionately, this leads to accumulation of unutilized ITC, for which no refund is available as per Section 54 of CGST Act. It is thus submitted that either way, the petitioner is prejudiced and thus the petition ought to be allowed by holding that the petition has not become infructuous. D. Submissions on behalf of the Petitioner:- 45. Mr. Arvind Datar, learned Senior Counsel for the petitioner has made the following submissions in support of the reliefs prayed by the petitioner:- 46. Larsen & Toubro Ltd. and IHI Infrastructure Systems Co. Ltd., Japan (for short 'L&T/IHI') formed a consortium and emerged as a successful bidder in the MMRDA's project to construct a Trans Harbour Link, a 22 Km 6 lane road bridge, connecting Mumbai with Navi Mumbai. The consortium had entered into a "Contract Agreement" with the MMRDA. The consortium was formed with a Japanese partner in view of the Special Terms for Economic Partners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovt. 12 5 Back-to-Back payment by Consortium to L&T/IHI 100+12 GST 6 Consortium's INPUT TAX from sl. No. 5, denied as ITC until Consortium receives service from L&T/IHI 12 7 Thus, output tax under sl.no. 4 is remitted in cash 12 AFTER PROJECT WORK COMMENCES 8 Aggregate of subsequent payments by MMRDA to the Consortium (net of recovery of Cl.14.2-payments) 900+108 GST 9 Consortium's output tax to be remitted (in cash or by ITC) by the Consortium to the Govt. 108 10 Aggregated of subsequent back-to-back payments by the Consortium to L&T and IHI (net of recovery of cl. 14.2-payments) 900+108 GST 11 Consortium's INPUT Tax (sl.No.10), available as ITC 108 12 Thus, output tax under sl. no.9 is remitted thru ITC 108 NET RESULT 13 Amount of ITC remaining un-utilisable with the Consortium = sl. no.6 12 If s. 16 (2) (b) had not arbitrarily denied ITC until supply is effected (despite tax being remitted on upon receipt of the cl. 14.2-payment), the liability at sl. no. 4 would have been paid out of the ITC at sl. No .6. There is thus outgo of cash twice from the consortium, and consequently receipt of cash twice by the government. 48. It is hence su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es or both". It is submitted that the plain reading of Article 246A read with Article 336 (12A) would show that GST can be levied only on supply of goods and not on 'future supplies', as contemplated by Sections 7, 12 and 13 of the CGST Act. The latter two provisions fix the time of supply as earlier of receipt, invoice or actual supply. It is thus submitted that Section 7 defines supply to include "supplies to be made" is ultra vires the provisions of Article 246 read with Article 366 (12A) and Article 265 of the Constitution. 51. In such context, it is further submitted that the CGST Act tacitly recognizes that supply ought to have been made for GST to be levied, and hence, the legal fiction in the "Explanation" below Section 13 (2) that supply is deemed to have been received to the extent of payment, would create an anomalous situation, for the reason that any legal fiction to enlarge the subject matter of taxation, can be made only by a Constitutional amendment as was done with the 46th Constitutional Amendment in the matter of sale tax by inserting Article 366(29A). In supporting the proposition, reliance is placed on the decision of the Supreme Court in State of Madras v. Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utional, the petitioner is consequently entitled to refund of the amounts paid. 54. Insofar as prayer clause (c) is concerned, namely substantive denial of benefit of 'input tax credit' (ITC), it is submitted that Section 13 (2) (b) read with the 'Explanation' thereto creates a legal fiction whereby supply is deemed to have been made on the date of receipt of payment. Thus, the liability to pay the tax arises simultaneously at the time of payment. It is submitted that, however, Section 16 (2) (b) provides that ITC cannot be claimed unless supply is received. It is submitted that this is plainly arbitrary and creates a serious hardship because the supplier is unable to utilize the ITC towards any output tax that he may be liable, for such reason Article 300A would stand breached in such situation. This would also go against the professed purpose of GST, as well as the formal Statement of Objects and Reasons (S.O.R.) attached to the CGST Bill which provides the object of CGST legislation to be "to broad base the input tax credit by making it available for taxes paid on any supply of goods or services or both used or intended to be used in the course or furtherance of business." 55. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Section 16 (2) (b) through the fiction. 58. Insofar as the challenge raised in prayer clause (c) is concerned, it is submitted that there cannot be a procedural denial of ITC. In such context, the submission is that even proceeding on the basis that ITC of the GST remitted on advance payments for services is available, it is submitted that the receipt voucher which is the document required by Section 31 (3) (d) in respect of an advance, has not been specified under Rule 36 of the CGST Rules as a document based on which ITC can be taken. It is submitted that Rules cannot take away what a Statute provides. It is also settled that tax credit cannot be denied because a document other than a prescribed document forms the basis of a claim so long as the claim is genuine. This proposition is supported by referring to the decision in Commissioner of Central Excise, Goa Vs. Essel Propack Ltd. 2015 (39) S.T.R. 363 (Bom.). It is for such reason and to dispel such cloud, a declaration is sought to the effect that ITC may be taken on the basis of a receipt voucher. 59. In regard to the challenge of the petitioner in prayer clause (d) about the denial of refund of unutilised ITC, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch contention, reliance is placed on the reply affidavits filed on behalf of respondent No. 3. 62. Ms. Cardozo would next submit that the writ petition be held to be not maintainable as the same has been filed by the petitioner without fully exhausting the alternate remedy of an appeal as availed by the petitioner which is pending adjudication. It is hence submitted that on such count the petition needs to be dismissed. Ms. Cardozo in support of her submission has placed reliance on the decision of the Supreme Court in Union of India vs. V.K.C. Footsteps India Private Ltd. (2022) 2 SCC 603. Ms. Cardozo submits that Supreme Court in paragraph 110 of this decision has observed that refund of unutilised ITC is available only in case of inverted tax structure and in cases of zero rated supplies and there is no constitutional entitlement to refund. It is, therefore, her contention that the petitioner is not eligible for refund as per the decision of the Supreme Court. 63. Ms. Cardozo, relying on the written submissions filed on behalf of GST Council, would not dispute that the Receipt Voucher needs to be recognized as an invoice and it would be a document on which ITC can be claimed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for respondent Nos.2 - State Authorities has made the following submissions: 69. At the outset, it is submitted that the petitioner has applied for refund of unutilized ITC which was rejected and an appeal against the rejection order is pending, however, the petitioner, in these circumstances, has challenged the vires of the provisions of the CGST Act and the Rules, which, according to the petitioner, is outside the scope of the appeals which are pending, hence, such challenge can be raised by the petitioner after the pending appeals are decided. It is contended that at the material point of time, it could be assumed that ITC was not available to be utilized for the reason that the services were not provided or received, but on a later date, when the services were provided, such ITC was available and it can be safely presumed that ITC was not available at the time of receiving payment, however, in due course of time when service was provided, ITC is utilized full against the outward supply of services. 70. Mr. Sonpal submits that the Receipt Voucher (RV) is not a document specified under Rule 36 of the CGST Rules and, therefore, the petitioner cannot claim ITC under Section 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Submission on behalf of the petitioner :- 73. Section 54 (3) deals with ITC whereas the petitioner is challenging the vires and refund of output tax liability and, therefore, the decision in case of Union of India vs. VKC Footsteps India Private Limited 2021 (52) GSTL 513 (SC) is not applicable. 74. As merely because Article 366 (12A) excludes alcoholic liquor, it cannot be contended that the respondents can levy tax on future supplies also. Section 13 (2) deems to have been rendered in case of advance receipt but the same is contrary to Article 366 (12A) which speaks only on supply of goods and not on future supplies. The definition sought to be made between the goods and services by the respondents is contrary to the object of the Constitution (101st Amendment) Act which "provides for a common national market for goods and services" based on logo "One Nation One Tax". There cannot be intelligible distinction between the goods and services and why the services are not exempted when the goods are exempted qua advance receipt. 75. We have heard learned counsel for the parties and with their assistance, we have perused the record. We now proceed to discuss the issues which fall fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for Interim Payment Certificates] and after the Employer receives (i) the Performance Security in accordance with Sub-Clause 4.2 [Performance Security] (ii) a guarantee in amounts and currencies equal to the advance payment. This guarantee shall be issued by an entity and from within a country (or other jurisdiction) approved by the Employer, and shall be in the form annexed to the Contract Data or in another form approved by the Employer. The Contractor shall ensure that the guarantee is valid and enforceable until the advance payment has been repaid, but its amount may be progressively reduced by the amount repaid by the Contractor as indicated in the Payment Certificates. If the terms of the guarantee specify its expiry date, and the advance payment has not been repaid by the date 28 days prior to the expiry date, the Contractor shall extend the validity of the guarantee until the advance payment has been repaid. Unless stated otherwise in the Contract Data, the advance payment shall be repaid through percentage deductions from the interim payments determined by the Engineer in accordance with Sub-Clause 14.6 [Issue of Interim Payment Certificates] as follows: (a) de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for Changes in Legislation) and Sub-Clause 13.8 (Adjustments for Charges in Cost); (c) any amount to be deducted for retention, calculated by applying the percentage of retention stated in the Contract Data to the total of the above amounts, until the amount so retained by the Employer reaches the limit of Retention Money (if any) stated in the Contract Data; (d) any amounts to be added and deducted for the advance payment and repayments in accordance with Sub-Clause 14.2 [Advance Payment]; (e) any amounts to be added and deducted for Plant and Materials in accordance with Sub-Clause 14.5 [Plant and Materials intended for the Works]." (emphasis supplied) 78. On a bare reading of clause 14.2 of the contract agreement (supra), it is quite clear that the parties agreed that the employer (MMRDA) shall make an advance payment which would be an interest free loan, which could be so treated by the parties, by acting in the specified manner, as clauses 14.2 and 14.3 would require. Such advance payment was to be utilized for mobilization and design, being the project works, inter alia on the conditions as agreed between the parties. In our opinion, a reading of Clause 14.2 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard the nature and character of such payment did not attract payment of GST. Such aspect needs to be examined. This more particularly for two fold reasons, firstly that clause 14.2 read with clause 14.3 indicates that the advance payment does not simplicitor remain to be "an interest free loan" as the advance payment is permitted to be proportionately deducted, as it forms part of the contract amount which becomes payable by MMRDA (employer) to the contractor (petitioner). Also clause 14.2 does not bring about a consequence that advance payment would continue to remain as a loan to be repaid by the petitioner from whatever resources and hence such loan does not have any relation with the performance of the contract. This apart, the advance payment as specifically agreed between the parties under clause 14.2 is for the purpose of mobilization and design, hence, even on such count necessarily it is integral to the contractor (petitioner) and its constituents, discharging their obligations under the contract. 81. Having examined the nature and working of the advance payment arrangement as contemplated under the said clauses of the contract agreement, we examine as to how the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra, India 400051. Local Address: L&T - IHI Consortium C/o Larsen & Toubro Limited, Landmark 'A' wing 5th Floor, Suren Road, Andheri East, Mumbai:-400093 Detail of Engineer: Name: Dr. S H Robin Sham, CBE M/s. AECOM Asia Company Ltd., PADECO Co. Ltd - Al-Handasah Consultants -TY Lin International Consortium Regd. Address: L&T - IHI Consortium, Nuclear and Special Bridges Business Unit, L&T Construction, C/o Larsen & Toubro Limited, Mount Moonamalee Road, Manapakkam, P. B. N. 979, Chennai-600089, Tamil Nadu, India. Address: 6th Floor, 'A' Wing, MMRDA Old Building, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051, India. S. No. Description SAC Code INR USD JPY EU RO 1 First Installment of Mobilization Advance (5% of Accepted Contract Amount) in all applicable Currencies and proportions less GST Component 9954 Rs.2,237,281,644 $ 6,646,392 ¥ - GBP - A Total Amount Before Tax (A) Rs.2,237,281,644 $ 6,646,392 ¥ - GBP - (B) Exchange Rate Rs. 1.0000 Rs. 64.8660 A Total Amount Before Tax (AXB) Rs. 2,237,281,644.07 Rs. 431,124,887,66 CGST @ 6% Rs. 134,236,899 Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Progress LS 1.0000 2237281644.0000 2237281644.00 Total Basic Amount Total Taxable Amount CGST - 6.00% - Maharashtra SGST - 6.00% - Maharashtra Grant Total Less: Deductions 00012548-PROGRESS BILLS-RETENTION DUE IT-INCOME TAX Total Deduction Net Amount Payable 13,42,36,898.64 13,42,36,898.64 0.00 0.00 2237281644.00 2237281644.00 268473797.28 2505755441.28 0.00 2505755441.28 (Indian rupee Two Hundred and Fifty Crore, Fifty-Seven Lakh, Fifty - Five Thousand, Fourt Hundred and Forty-One and Twenty-Eight Paise Only) We Hereby Certify That our Registration Certificate Under The GST Act Is In Force On The Date On Which The Supply Of The Goods / Service Specified In this tax Invoice Is Made By Us And That The Transaction of supply Covered by this Bill Has been effecgted by us In The Regular Course of Our Business, and appropriate GST Will Be Remitted by us to the exchaquar If Any Exemption/Reducgtion Of Tax Under The GST Act Is Claimed By You. Valid Declaration Must Be Received By Us Within 15 Days, Falling Which No Adjustment Will Be Possible. If The Above Sale Is Assessed To Tax At A Higher Rate, The Extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the provisions of the GST Act are required to be noted, which read thus:- 2. Definitions. - In this Act, unless the context otherwise requires, - (31) "consideration" in relation to the supply of goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; (59) "input" means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business; (60) ..... 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(n) every artificial juridical person, not falling within any of the above; (90) "principal supply" means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; (93) "recipient" of supply of goods or services or both, means-- (a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and (c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied; (102) "services" means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract;" 87. Having noted the relevant definitions, we may observe that the definition of 'consideration' which is in relation to the supply of goods or services or both, inter alia includes "any payment made" or "to be made", whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both and such payment shall not include any subsidy given by the Central Government or a State Government. Applying the definition of consideration to the advances as received by the petitioner, the payment received as an advance would partake the character of a 'consideration' in relation to the supply of services. This also bearing in mind that the advance payments as received by the petitioner, is in relation to a works contract as defined under section 2 (119) of the CGST Act. 88. Further, the advance payment contractually received by the petitioner, having merged at a later point of time to form payment to be received by the petitioner-Consortium, is not in dispute. A technical plea, however, is sought to be raised on behalf of the petitioner, which is to the effect that on the first tranche of the advance payment being received by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omic legislation also would be relevant insofar as the tax legislation is concerned, wherein the wisdom of the legislature, in its anticipation, working and the implications brought out by the tax provision, is also required to be of paramount consideration, in testing the constitutional validity of such legislation when tested on the well settled principles of law in that regard, which primarily are legislative competence, and the law being ultra vires the constitutional provisions or falling under the category of a legislation which is manifestly arbitrary. 91. The following observations of the Supreme Court in R. K. Garg Vs. Union of India & Ors. (supra), in our opinion, are apt in the context of the present proceedings:- "8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrine or straight jacket formula and this is particularly tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues." 92. In State of M. P. Vs. Rakesh Kohli & Anr. (supra), the Court was considering the challenge whether the High Court was justified in declaring Clause (d) of Article 45 of Schedule 1-A of the Indian Stamp Act, 1899 which was brought in by the Indian Stamp (Madhya Pradesh Amendment) Act, 2002 as unconstitutional being violative of Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down only if it is found that it is violative of the equality clause/equal protection clause enshrined therein. Similarly, if an enactment is challenged as violative of any of the fundamental rights guaranteed by clauses (a) to (g) of Article 19 (1), it can be struck down only if it is E found not saved by any of the clauses (2) to (6) of Article 19 and so on. No enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or other constitutional infirmity has to be found before invalidating an Act. An enactment cannot be struck down on the ground that court thinks it unjustified. Parliament and the legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The court cannot sit in judgment over their wisdom " (Emphasis supplied) Then dealing with the decision of this Court in State of T.N. and others v. Ananthi Ammal and others (1995) 1 SCC 519, a three-Judge Bench in Mcdowell and Co. observed in paragraphs 43 and 44 [at pg. {39) of the Report as under : " ...... Now, coming to the decision in Ananthi Ammal, we are of the opinion that it doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In our opinion, there is one and only one ground for declaring an Act of the legislature (or a provision in the Act) to be invalid, and that is if it clearly violates some provision of the Constitution in so evident a manner as to leave no manner of doubt. This violation can, of course, be in G different ways e.g. if a State Legislature makes a law which only Parliament can make under List I to the Seventh Schedule, in which case it will violate Article 246 (1) of the Constitution, or the law violates some specific provision of the Constitution (other than the directive principles). But before declaring the statute to be unconstitutional, the court must be absolutely sure that there can be no manner of doubt that it violates a provision of the Constitution. If two views are possible, one making the statute constitutional and the other making it unconstitutional, the former view must always be preferred. Also, the court must make every effort to uphold the constitutional validity of a statute, even if that requires giving a strained construction or narrowing down its scope vide Rt. Rev. Msgr. Mark Netto v. State of Kerala SCC para 6: AIR para 6. Also, it is none of the concern of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) 5 SCC 239. 28. In R.K. Garg, the Constitution Bench of this Court stated that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. 29. While dealing with constitutional validity of a taxation law enacted by Parliament or State Legislature, the court must have regard to the following principles: (i), there is always presumption in favour of constitutionality of a law made by Parliament or a State Legislature (ii), no enactment can be struck down by just saying that it is arbitrary or unreasonable or irrational but some constitutional infirmity has to be found (iii), the court is not concerned with the wisdom or unwisdom, the justice or injustice of the law as the Parliament and State Legislatures are supposed to be alive to the needs of the people whom they represent and they are the best judge of the community by whose suffrage they come into existence (iv), hardship is not relevant in pronouncing on the constitutional validity of a fiscal statute or economic law and (v), in the field of taxation, the Legislature enjoys greater latitude for classification." 93. Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. (3) Subject to the provisions of [sub-sections (1), (1-A) and (2)], the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as-- (a) a supply of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods." This clause provides the scope of supply. This clause provides for activities to be treated as supply. This clause further provides that certain activities, specified in Schedule I of the proposed Act, even made or agreed to be made without a consideration shall be treated as supply. This clause also provides activities which are neither supply of goods nor supply of services. (Notes on Clause)." "Section - 9. Levy and collection. - (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of supply. (4) In case of supply of vouchers by a supplier, the time of supply shall be-- (a) the date of issue of voucher, if the supply is identifiable at that point; or (b) the date of redemption of voucher, in all other cases. (5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall-- (a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or (b) in any other case, be the date on which the tax is paid. (6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value. This clause provides for time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier. (4) In case of supply of vouchers by a supplier, the time of supply shall be-- (a) the date of issue of voucher, if the supply is identifiable at that point; or (b) the date of redemption of voucher, in all other cases. (5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall-- (a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or (b) in any other case, be the date on which the tax is paid. (6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value. This clause provides for time of supply of services. This clause extensively elaborates time of supply in normal situations, in reverse charge situations, in situations of supply of voucher and remainder situations. (Notes on Clauses)." (emphas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rase "in the course or furtherance of business" in section 7 (1) (a) would be required to be given its due and desired meaning. Also, relevance is required to be attributed to the difficult incidents of the transactions, the provision includes namely of "sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration", so as to mean and constitute a supply under Section 7 (1) (a) is necessarily required to be in the course or furtherance of business. Once the test in such form is satisfied in relation to the supply of goods or services, the levy of collection of tax under Chapter III and more particularly, Section 9 (charging section) would stand attracted. As to how the expression "in the course or furtherance of business" is legally understood and interpreted by the Courts can be discussed. 96. In Commissioner of Gift Tax, Kerala Vs. P. Gheevarghese, Travancore Timbers and Products, Kottayam AIR 1972 SC 23 the Supreme Court dealing with the issue under the Gift Tax Act was considering the interpretation of the words "in the course of carrying on a business". The Court observed that the words "in the course of" were considered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IR 1975 SC 1564, the Supreme Court held that the expression "in the course" implies not only a period of time during which the movement is in progress but postulates a connected relation. It was held that the sale in the course of export out of the territory of India, means sale taking place not only during the activities directed to the end of exportation of the goods out of the country, but also, as part of or connected with such activities. 98. In Mahadeo Ram Bali Ram vs The State Of Bihar AIR 1959 PATNA 30, the Patna High Court considered the expression "in the course of" as used in Article 286 (1) (b) of the Constitution, when it held that the expression postulates that the transaction of sale must be an integral part of the activity of exporting the goods out of the country. 99. Adverting to the above interpretation of the expression "in the course of business" and in the present context, an expression added to it namely of the words "in furtherance of business", as used in Section 7 (1) (a) would necessarily mean that the supply is connected to or in relation to the activities in question or is the integral part of such activity. By applying such interpretation, it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the nature of the contract. 103. In our opinion, thus, the contentions as urged on behalf of the petitioner cannot be accepted, for the reason that the petitioner's reading of Section 7 would not amount to a correct reading of the provision. We may also observe that Section 7 is required to be holistically read. As noted above merely for the reason that Section 7 (1) (a) uses the word "or agreed to be made for a consideration", so as to define "supply", would not render nugatory the contents of the earlier part of sub-clause (a) of sub-section (1) which categorically provides that supply includes all forms of supply of goods or services or both. The petitioner is not denying that, in the facts of the present case, considering the purport of Clause 14.2 read with Clause 14.3 of the contract agreement, advance payment would also form part of the consideration in relation to the contract in question. If this be so, the legislature in its wisdom has not only in terms of Section 7 (1) (a), but further by insertion of clause (aa) in sub-section (1) of Section 7, included such "supply of goods or services agreed to be made for consideration or a deferred payment for other valuab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 106. We now move to the next challenge of the petitioner, that is to the provisions of Section 12 and 13 of the CGST Act which are also asserted to be ultra vires the provisions of Article 246A read with Article 366 (12A) and violative of Articles 14, 19 (1) (g), 265 and 300A of the Constitution of India, in so far as they apply to "supplies agreed to be made". As noted above, Sections 12 and 13 fall under Chapter IV of the CGST & MGST Act. Section 12 pertains to "time of supply of goods", which stipulate that the liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the said provision. Sub-section (2) (a) provides that the time of supply of goods shall be the earlier of the dates namely the date of issue of invoice by the supplier or the last date on which he is required under Section 31(1), to issue the invoice with respect to the supply; or in terms of sub-section 2(b) the date on which the supplier receives the payment with respect to the supply. Similarly, Section 13 provides for "time of supply of services" which ordains that the liability to pay tax on services shall arise at the time of supply, as determined in accordance with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth. It is hence the petitioner's case that once the actual supply itself is not made, there is no warrant for the levy in question either by virtue of the applicability of Section 7 read with Section 9 and Sections 12 and 13. 108. We are of the opinion that for reasons similar as discussed by us in considering Section 7 of the CGST/MGST Act, Sections 12 and 13 also cannot be held to be ultra vires the constitutional provisions, on which even Section 7 was assailed by the petitioner. Once it is established that advance payment was received by the petitioner as per the terms and conditions of the 'contract agreement' which was received as the 'mobilization advance', as specifically claimed and accepted by the petitioner, such payment/receipt from the MMRDA would necessarily pertain to supply as defined under Section 7, read with the provisions of Section 2(31) which defines consideration. Hence, the liability to pay tax in terms of Sections 12 and 13 (2) had arisen on the date of receipt of payment by the petitioner from the MMRDA. Such amount of advance was thereafter remitted by the petitioner to its constituent L&T along with the outward tax as deposited with the government, how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and if this be so, it is held by the Supreme Court that any uncertainty or vagueness in the legislative scheme defining any of these components of the levy will be fatal to its validity. There can be dispute on such proposition which had arisen before the Supreme Court involving the interpretation of Sections 14 and 15 of the Central Sales Tax Act. The issue was whether the turnover of the goods was subject to tax under the sales tax law of a State, considering that Section 15 prescribed the maximum rate at which such tax may be imposed requiring that such tax shall not be levied at more than one point. Two conditions were imposed in order to ensure that inter-State trade or commerce in such goods is not hampered by heavy taxation within the State occasioned by an excessive rate of tax or by multi point taxation. It is in such context, the Supreme Court held that Section 15 enacts restrictions and conditions which are essential to the validity of an impost by the State on such goods and if either of the two conditions are not satisfied, the impost would be invalid. It was observed that in order that the tax should not be levied at more than one stage, it was imperative that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere imported from abroad. The transactions for sale and purchase between the foreign supplier and the appellant company were in the nature of CIF contracts i.e. price included costs, insurance and freight charges. Hence the price which was paid included not only the cost of the goods but also the insurance and freight charges. The customs authorities, however, in determining the value of the goods for the purpose of ascertaining the amount of duty payable, added to the CIF price the landing charges which were paid to the Port Trust Authorities. On the payment of the customs duty, the goods were cleared and used by the appellants. Such action of the custom authorities was challenged by the appellant by approaching the High Court inter alia contending that the landing charges which were paid at the rate ¾% of the CIF value of goods had been wrongly added while arriving at the assessable value of the goods and, therefore, the High Court should direct refund which was the amount of duty relatable to the landing charges. The High Court rejected the appellant's contention. It is in these circumstances, the proceedings reached the Supreme Court. In deciding such issue, the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the next contention of the petitioner, namely the challenge to the vires of Section 16 of the CGST Act, which provides for "Eligibility and conditions for taking input tax credit". The case of the petitioner is that in the event, GST as paid by the petitioner on the advance amounts as received from the MMRDA is considered to be valid and the challenge as raised by the petitioner to the provisions of Sections 7, 12 and 13 fails, in such event it be held that the petitioner had become entitled to avail of the Input Tax Credit (ITC) as per the provisions of Section 16 of the CGST Act. The petitioner however contends that the purport of Section 16 (2) (b) does not permit the petitioner to utilize the Input Tax Credit, inasmuch as the conditions as incorporated under sub-section (2) (b) makes it mandatory that the petitioner has received goods or services or both. It is, therefore, the petitioner's contention that when clearly GST was deposited by the petitioner and at such point of time, the petitioner having not received the supply of goods or services from L & T, by virtue of Section 16 (2) (b) for want of supply of goods and services and an invoice from L&T, the petitioner was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods 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 title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person]; 3(ba) the details of input tax credit in respect of the said supply communicated to such registered person under Section 38 has not been restricted; (c) subject to the provisions of 4[section 41] 5[xxx], the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns with non-obstante clause, which provides that "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 the requirements of clauses (a), (aa), (b), (ba) read with explanation, (c) and (d) are fulfilled. 115. It is the petitioner's case that the petitioner's eligibility under Section 16 to avail of the Input Tax Credit is being taken away for two fold reasons. Firstly, that the petitioner is not in a position to comply with sub-section (2) (a), which provides that the petitioner should be in possession of a tax invoice or debit note issued by a supplier registered under the Act or such other tax paying documents as may be prescribed. The petitioner reads sub-section (2) (a) in the context of Section 31 (3) (d) providing that a registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment. Secondly, it is contended that the petitioner although having deposited GST would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 31 were available with the petitioner. It is, therefore, necessary that the revenue officials carefully apply their mind to the nature of the transaction more particularly when the transaction is peculiar, as in the present case as entered with a government body (MMRDA), and get satisfied as to how the transaction is to take effect with the registered person who would be receiving the goods or services. 117. The revenue officials in the present case could not have been oblivious that the contract agreement between MMRDA and the petitioner was a peculiar contract and/or one of its kind involving the petitioner-Consortium, which is a combination of technical and financial entities, coming together and accepting the contract to construct a bridge of 22kms over the sea. It is in such context, the petitioner dealing with the wing of the State Government, namely, the MMRDA accepted the advance payment as the mobilization advance and paid GST thereon, with an express covenant that the advance is permitted to be adjusted in the supply of goods and services being provided to the benefit of MMRDA. It is with such pivotal consideration, the transaction ought to have been vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit into electronic credit ledger as permissible under Section 16(1), however, on the other hand, merely on an interpretation that the goods or services are in the process of being received and which are certainly to be received under the contract, the benefit of the input tax credit is being denied. If such denial of supply is to be accepted, a converse situation emanates namely that by virtue of Section 12 or 13, the Government becomes recipient of the tax, despite there being no supply, however, at the same time, under the GST provisions having received the tax, at the threshold, the credit of such tax is being taken away or denied to the registered person. Certainly such consequence is not postulated from the very scheme of the GST legislation. We may thus observe that if we do not read and interpret the provisions of Section 16 (2) (b) in the manner as discussed hereinabove, it is also likely to create an anomalous effect on the operation of Section 13 (2), namely that the liability to pay tax on services would be required to be reckoned, not on what has been provided under sub-section (2) of Section 13, but only on the deferred date, when the goods or services are actually re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt of such payment; (e) where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment; (f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both; (g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier." (emphasis supplied) 121. Section 31 would be required to be read with Rule 36 of the Central Goods and Service Tax Rule 2017 which falls under chapter V - Input Tax Credit. Rule 36 reads thus: "36. Documentary requirements and conditions for claiming input tax credit.- (1) The input tax credit shall be availed by a registered person, including the Input Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply, no invoice was available or issued so as to entitle the petitioner to claim the input tax credit. We may however observe that the respondent No. 3 namely the GST Council and respondent No. 4-Deputy Commissioner of Income of State Tax on such issue have argued before us in different voices. In these circumstances, certainly, the position as taken by the GST Council is required to be accepted when Ms. Patricia Cardoza appearing for the GST Council has fairly submitted that the "Receipt Voucher" is a tax paying document as also submitted at page 5 of her written submissions. 123. We may observe that in the facts and circumstances of the case, there was no doubt either with the petitioner or with any of the respondents and more particularly in the context of the peculiar contract agreement, under which the parties have acted and under which the "Advance Receipt Voucher (ARV)" of the nature issued by the petitioner to the MMRDA, as also the "Receipt Voucher" issued by L&T to the petitioner, satisfied the requirements of Section 31 read with Rule 39 as tax was deposited with the Government under the ARV and the same was remitted as an output tax to L&T by the petitioner. 124. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement of the petitioner to the refund of the ITC and/or any excess tax as paid is concerned, we do not delve on such issue as fairly submitted, as the same is subject matter of consideration in the appeal filed by the petitioner against rejection of the petitioners refund application including on the application of principles as laid down by the Supreme Court in the case of Union of India & Ors. vs. VKC Footsteps India Pvt. Ltd. (supra) as also the interpretation on clauses 14.2 and 14.3 and other clauses of the contract agreement as entered between the parties. We keep open all contentions of the parties to agitate such issues in the said proceedings. 126. Before parting we may observe that at the Bar there are several decisions cited by the parties which we have noted in the foregoing paragraphs. The principles of law laid down in such decisions are well settled, however, to avoid prolix we deem it appropriate not to discuss these decisions, suffice it to observe that we have discussed only those decisions, the context of which necessitated. 127. In the light of the above discussion, we dispose of this petition in terms of the following order: ORDER (i) The prayers of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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