Karnataka High Court
M/S Ammas Aluminium And Hardware vs The Union Of India on 23 September, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
-1-
NC: 2024:KHC:39171
WP No. 23763 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF SEPTEMBER, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 23763 OF 2023 (T-RES)
BETWEEN:
M/S. AMMAS ALUMINIUM AND HARDWARE
SHOP NO.2, 230-6, GROUND FLOOR,
80 FEET ROAD, 2ND BLOCK,
HBR LAYOUT, KALYANAGARA POST,
BENGALURU-560043,
REPRESENTED BY ITS PARTNER,
MARIA DASS ASIR,
REGISTERED UNDER THE GOODS
AND SERVICE TAX ACT, 2007
...PETITIONER
(BY SRI. SURYA KANTH C.S, ADVOCATE)
AND:
1. THE UNION OF INDIA
Digitally signed REPRESENTED BY ITS
by LEELAVATHI
SR FINANCE SECRETARY,
MINISTRY OF FINANCE,
Location: HIGH
COURT OF DEPARTMENT OF REVENUE,
KARNATAKA GOVERNMENT OF INDIA,
NORTH BLOCK,
NEW DELHI-110001.
2. THE STATE OF KARNATAKA
REPRESENTED BY ITS PRINCIPAL SECRETARY,
FINANCE DEPARTMENT, VIDHANA SOUDHA,
GOVERNMENT OF KARNATAKA,
BENGALURU-560001
3. THE COMMISSIONER OF COMMERCIAL
TAXES IN KARNATAKA
-2-
NC: 2024:KHC:39171
WP No. 23763 of 2023
VANIJYA THERIGE KARYALAYA-1,
1ST MAIN ROAD, GANDHINAGAR,
BENGALURU-560 009.
4. THE ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
LGSTO-055, NO.11 AND 12,
GROUND FLOOR, BDA COMPLEX,
HBR LAYOUT, KALYANAGARA,
BENGALURU-560043.
...RESPONDENTS
(BY SRI. B.PRAMOD, ADVOCATE FOR R1;
SRI. HEMAKUMAR K., AGA FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARE THE
PROVISION OF SECTION 16(4) OF CGST ACT/SGST ACT, 2017, AS
BEING ILLEGAL, UNREASONABLE, ARBITRARY AND
DISCRIMINATORY AND THEREFORE TO BE STRUCK DOWN AS
VIOLATIVE OF ARTICLES 14, 19 AND 300A OF THE
CONSTITUTIONAL OF INDIA. IN THE ALTERNATIVE, THIS HONBLE
COURT MAY TO READ DOWN THE SAID WORDINGS CONTAINED
IN SECTION 16(4) OF CGST/SGST ACT, 2017 SO AS TO INTERPRET
THE TIME LIMIT FOR TAKING INPUT TAX CREDIT AS PROCEDURAL
AND DIRECTORY IN NATURE. QUASH THE ADJUDICATION ORDER
PASSED U/S 73 OF THE KGST ACT/CGST ACT, 2017 / ORDER U/S
21 OF THE IGST ACT R/W SECTION 16(4), 50 AND 122 OF THE GST
ACT, 2017 BEARING NO.ACCT/LGSTO-55/T.NO.2671/2023-24 DATED
27.07.2023 FOR THE PERIOD FEBRUARY 2020 TO MARCH 2020
PASSED BY THE R4 AT ANNEXURE-D AND ETC.
THIS PETITION COMING ON FOR ORDERS THIS DAY, ORDER
WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
ORAL ORDER
In this petition, petitioner seeks for the following reliefs:-
-3-NC: 2024:KHC:39171 WP No. 23763 of 2023 " a) Issue a writ of declaration or any other appropriate writ or direction declaring the provisions of section 16(4) of CGST Act/SGST Act, 2017, as being illegal, unreasonable, arbitrary and discriminatory and therefore to be struck down as violative of Article 14, 19 and 300A of the Constitutional of India;
b) In the alternative, this Hon'ble Court may to ' read down' the said wordings contained in Section 16(4) of CGST/SGST Act, 2017 so as to interpret the time limit for taking input tax credit as procedural and directory in nature;
c) Issue a writ of certiorari or any other appropriate writ or quash the Adjudication Order Passed Under Section 73 of the KGST Act/CGST ACT, 2017/ORDER UNDER SECTION 21 of the IGST Act read with Section 16(4), 50 and 122 of the GST Act, 2017 bearing No.ACCT/LGSTO-55/T-No.2671/2023-24 dated:
27.07.2023 for the period February 2020 to March 2020 passed by the Fourth Respondent at Annexure-D and consequential Notice of Demand in FORM DRC -07 bearing no. ACCT/LGSTO-55/T-No.2671/2023-24 dated: 27.07.2023 for the period February 2020 to March 20202 issued by the Fourth Respondent at ANNEXURE-E as violative of Articles 14, 19 and 300A being unreasonable, arbitrary, oppressive, excessive and premeditated.
d) Issue any other Writ or Directions deemed fit, in the facts and circumstances of the case, including the cost of the writ petition, in the interest of justice and equity."
-4-NC: 2024:KHC:39171 WP No. 23763 of 2023
2. Heard learned counsel for the petitioner and learned counsel for the revenue and learned AGA for the State and perused the material on record.
3. A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in the case of M/s.Sadhana Enviro Engineering Services vs. Joint Commissioner of Central Tax & others - W.P.No.6138/2020 dated 03.09.2024, which reads as under:-
2. Heard learned Senior counsel for the petitioner and learned counsel for the respondents - revenue and learned AGA for the State and perused the material on record.
3. Learned Senior counsel for the petitioner submitted that though several contentions have been urged by the petitioner who has also sought for various reliefs, during the pendency of the present petition, a new provision i.e., Section 16(5) has been inserted by "The Finance (No.2) Act, 2024" vide Central Act 15 of 2024, in which, Clause No.118 provides for condonation of delay in availment of credit and extended the time limit by providing that for supplies pertaining to the financial years 2017-18, 2018-19, 2019-20 and 2020-21, the petitioner would be entitled to avail / claim credit in any return filed up to -5- NC: 2024:KHC:39171 WP No. 23763 of 2023 30.11.2021. It is submitted that the said "The Finance (No.2) Act, 2024" received presidential asset on 16.08.2024 and would be notified shortly. It was further submitted that in cases where assessees had paid amounts as pre-deposit under court orders or in appeal proceedings or amounts recovered by the respondents -
revenue are paid by the assessees pursuant to recovery proceedings, the embargo contained in Clause 150 of the said "The Finance (No.2) Act, 2024" would not apply and was not applicable to the assessees, who would not be covered by the said embargo and consequently, they would be entitled to refund of the said amounts. It is therefore submitted that without going into the various other contentions urged by the petitioner and reliefs sought for by it and without expressing any opinion on the same, the present petition may be disposed of with a direction to consider and implement and give effect to the amended provisions contained in Section 118 of "The Finance (No.2) Act, 2024" relating to insertion of Section 16(5) to the CGST Act / KGST Act within a stipulated time frame.
4. Per contra, learned counsel for the respondents
- revenue and learned AGA for the respondents - State jointly and fairly submit that it is true that Section 16(5) was inserted vide Clause 118 of "The Finance (No.2) Act, 2024"
and that the same was applicable to the petitioner and other assessees and the time for filing returns and availing input tax credit would stand extended upto 30.11.2021. It is also submitted that since presidential asset has already been received to "The Finance (No.2) Act, 2024", -6- NC: 2024:KHC:39171 WP No. 23763 of 2023 necessary Notification would be issued shortly and as such, the present petition may be disposed of accordingly.
5. As rightly contended by the learned Senior counsel for the petitioner as well as learned counsel for the respondents - revenue and learned AGA for the State, Section 16(5) was inserted into the CGST Act vide Clause 118 of the "The Finance (No.2) Act, 2024", which reads as under:-
"118. In Section 16 of the Central Goods and Services Act, with effect from the 1st day of July, 2017, after sub-section(4), the following sub-sections shall be inserted, namely:-
(5) Notwithstanding anything contained in sub-
section(4), in respect of an Invoice or Debit note for supply of goods or services or both pertaining to the financial years, 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under Section 39 which is filed up to the thirtieth day of November, 2021.
(6) xxxxxxxxxxxxx
(i) xxxxxxxxxxxxxx
(ii)xxxxxxxxxxxxxx "
6. In view of the aforesaid amendment by inserting Section 16(5) to the CGST / KGST Act, the present petition deserves to be disposed of relegating the parties to the original authority to implement and give effect to the said provisions after providing sufficient and reasonable opportunity to the petitioner and hearing them and proceed -7- NC: 2024:KHC:39171 WP No. 23763 of 2023 further in accordance with law and by issuing certain directions in this regard.
7. In the result, I pass the following:-
ORDER
(i) Petition is hereby disposed of.
(ii) The parties are relegated to the stage of show cause notice at Annexure-C dated 13.02.2020 issued by the respondent(s) and the respondents are directed to give effect to and implement the amended provisions contained in Section 118 of "The Finance (No.2) Act, 2024" relating to insertion of Section 16(5) to the CGST Act / KGST Act by providing sufficient and reasonable opportunity and hear the petitioner and proceed further in accordance with law within a period of one month from the date of receipt of a copy of this order.
(iii) The impugned blocking of the Input Tax Credit (ITC) ledger of the petitioner vide Annexure-F dated 03.02.2020 is hereby quashed.
(iv) The respondents are directed to unblock and release the credit balance of the petitioner in their ITC Ledger / Account, if not already released, immediately / forthwith upon receipt of a copy of this order without any delay.
(v) All rival contentions on all other prayers sought for by the petitioner including the challenge to the statutory provisions are kept open and no opinion is expressed on the same.
-8-NC: 2024:KHC:39171 WP No. 23763 of 2023
4. In view of the aforesaid facts and circumstances and the judgment of this Court in M/s.Sadhana Enviro Engineering's case supra, I am of the view that the present petition also deserves to be allowed and disposed of in terms of the said judgment.
5. In the result, I pass the following:-
ORDER
(i) Petition is hereby disposed of in terms of the judgment of this Court in the case of M/s.Sadhana Enviro Engineering Services vs. Joint Commissioner of Central Tax & others -
W.P.No.6138/2020 dated 03.09.2024.
(ii) The impugned Order at Annexure-D dated 27.07.2023 and Summary at Annexure-E dated 27.07.2023 are hereby quashed.
(iii) The parties are relegated to the stage of notice dated 14.06.2022 issued by the respondent(s) and the respondents are directed to give effect to and implement the amended provisions contained in Section 118 of "The Finance (No.2) Act, 2024" relating to insertion of Section 16(5) to the CGST Act / KGST Act by providing sufficient and reasonable opportunity and hear the -9- NC: 2024:KHC:39171 WP No. 23763 of 2023 petitioner and proceed further in accordance with law within a period of one month from the date of receipt of a copy of this order.
(iv) All rival contentions on all other prayers sought for by the petitioner including the challenge to the statutory provisions are kept open and no opinion is expressed on the same.
Sd/-
(S.R.KRISHNA KUMAR) JUDGE ST/Mds.
List No.: 1 Sl No.: 4