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TMI Blog2025 (2) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner the entire show-cause notice cannot be quashed.
Petitioner is required to establish its defence by producing documents before the competent authority, who shall examine the invoices and bills generated by all the noticees during the enquiry. It appears that in order to avoid the participation in the enquiry, petitioner is challenging the constitutional validity by placing reliance on the judgment passed by the Delhi High Court in case of On Quest Merchandising India Pvt. [2017 (10) TMI 1020 - DELHI HIGH COURT] in respect of Delhi Value Added Tax Act, 2004 in which the pari materia provision was 'read down'.
Conclusion - The non-obstante clause in the negative sentence in Section 16(2) restricts the eligibility under Section 16(1) for entitlement to claim ITC.
There are no good ground for entertaining this petition - petition dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceeding initiated vide the impugned show-cause notice. 4. In support of his contention, Shri Patne learned counsel for the petitioner has placed reliance on the judgment passed by the Division Bench of the High Court of Delhi On Quest Merchandising India Pvt. Ltd, vs. Government of NCT Delhi & Ors. reported in 2017 SCC Online Del 11286 wherein similar provision of the Delhi Value Added Tax Act, 2004 has been declared ultra vires . Shri Patne, learned counsel submits that Section 16(2) (c) of the CGST Act being pari materia also deserves to be 'read down' in the manner that its non-compliance by the supplier does not entail tax liability upon an innocent purchaser who has made all possible efforts and complied with all the rigors of law to avail Input Tax Credit against the supply. 5. On the other hand, Shri Prasanna Prasad, learned counsel appearing for the respondents No. 1 and 2 on advance notice submits that the validity of Section 16 has been upheld by various High Courts such as the High Court of Judicature at Patna in case of Gobinda Construction and others v. Union of India & Ors. [CWC No. 9108 of 2021] and High Court of Kerala in case of M.Trade Links vs. U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions under Section 16(2) are met, the timeline provided for availing the input tax credit under Section 16(4) is arbitrary and unsustainable and cannot be accepted. 91. x x x 92. Section 16(1) is subject to Section 49 and Section 16(2)(c) is subject to Section 41. Eligible ITC is self-assessed in the GSTR 3B return, and only then it is credited to the electronic credit ledger, which can be utilised for payment of tax. The Supreme Court in Union of India v. Bharati Airtel and others [(2022 4 SCC 328] has explained the procedure for availing the input tax credit under the GST laws. [As has been extracted in paragraph 86 of this judgment]. 93. The Patna High Court in Gobinda Construction and others v. Union of India and others [2023 SCC OnLine Pat 6463] , after placing reliance on the judgment in Jayam, ALD (supra) has upheld the constitutional validity of Section 16(4) and held that the concession/claim to ITC is not an absolute legal right. Paragraphs 22 to 30 of the said judgment are extracted hereunder:- "22. In the background of the above noted discussions, we need to examine first as to whether or not, the language of Section 16 of the CGST/BGST Act suffers from an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led, free of restrictions prescribed under subsection (2) thereof. In order to invoke Article 300-A of the Constitution by a person, two circumstances must jointly exist:- (i) Deprivation of property of a person (ii) Without sanction of law 27. We have briefly dealt with what the expression 'property' connotes as explained in case of Jilubhai Nanbhai Khachar vs. State of Gujarat & Anr. reported in AIR 1995 SC 142 , paragraph 42 of which reads thus :- "42. 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. Therefore, the word 'property' connotes everything which is subject of ownership, corporeal or incorporeal, tangibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn. We do not find any merit in the submissions so advanced, which deserves to be outrightly rejected." 98. In Willowood Chemicals vs. Union of India [2018 (58) GSTR 310 (Guj)] , in Paragraphs 30 and 35, it has been held that conditions restrictions and time limit are crucial for granting ITC and collection of tax of each financial year, otherwise, it would impact revenue collection, budgetary allocation and in rem revenue deficite. [Paragraphs 30 and 35 of the said judgment are extracted in paragraph 79 of this judgment.] Conclusion: 99. The Government had realized the difficulty in the initial roll out of the GST regime under the CGST/SGST Act and considered that GSTR 2A was not available initially in the Finance years, 2017-2018 and 2018-2019, during the implimentation of GST. In order to resolve all bona fide claims and mistakes, Circular No.183/15/2022- GST dated 27.12.2022 and Circular No. 193/05/2023- GST dated 17.07.2023 have been issued. Circulars cover the period from the introduction of GST till Section 16(2)(aa) was introduced with effect from 01.01.2022. The ITC can be availed by the recipient for the bona fide scenarios listed in those Circulars on submitting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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