Karnataka High Court
M/S Form N Square Architects vs The Union Of India on 24 September, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
-1-
NC: 2024:KHC:39559
WP No. 22653 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF SEPTEMBER, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 22653 OF 2023 (T-RES)
BETWEEN:
M/S FORM N SQUARE ARCHITECTS,
NO. 95, ISWARY ILLAM, II CROSS,
3RD MAIN, BHCS LAYOUT, BTM II STAGE,
BENGALURU-560 076.
REPRESENTED BY K. PRAVEEN KUMAR
PROPRIETOR,
REGISTERED UNDER
THE GOODS AND SERVICE TAX ACT, 2007.
...PETITIONER
(BY SRI. SURYA KANTH C S., ADVOCATE)
AND:
1. THE UNION OF INDIA
REPRESENTED BY ITS
FINANCE SECRETARY,
Digitally signed MINISTRY OF FINANCE,
by LEELAVATHI MINISTER OF REVENUE
SR
NEW DELHI-110 001.
Location: HIGH
COURT OF
KARNATAKA 2. THE STATE OF KARNATAKA,
REPRESENTED BY ITS SECRETARY
DEPARTMENT OF FINANCE,
GOVERNMENT OF KARNATAKA,
AMBEDAKR VEEDHI, BENGALURU-560 001.
3. THE COMMISSIONER OF COMMERCIAL
TAXES IN KARNATAKA
VANIJYA THERIGE KARYALAYA,
1ST MAIN ROAD, GANDHINAGAR,
BENGALURU-560 009.
-2-
NC: 2024:KHC:39559
WP No. 22653 of 2023
4. THE ASSISTANT COMMISSIONER OF COMMERCIAL
TAXES
LGSTO-25, 2ND FLOOR, BLOCK A,
REGIONAL COMMERCIAL TAX OFFICE,
VTK-2, RAJENDRA NAGAR, KORAMANGALA
BENGALURU-560 047.
...RESPONDENTS
(BY SRI.KESHANV K.,ADVOCATE FOR R1;
SRI. HEMA KUMAR., AGA FOR R2, R3 & R4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO A) 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 IN SO FAR AS PETITIONER IS
CONCERNED AND B) 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 AND ETC.,
THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING IN B GROUP, 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:-
"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 in so far as Petitioner is concerned.-3-
NC: 2024:KHC:39559 WP No. 22653 of 2023
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 impugned order bearing no. CTO/LGSTO- 025/DRC-07/T.63/2022-23 dated 09/01/2023 for the period 2018 to 2019 passed under Section 73 of KGST / CGST Act read with Section 6 of the CGST Act, 2017 and order under Section 20 of IGST Act, 2017 issued by the fourth respondent at ANNEXURE-B and consequential Notice of Demand in Form GST DRC-07 Bearing No. CTO/LGSTO- 025/DRC-07/T.63/2022-23 for 2018-2019 dated 09/01/2023 issued by the Fourth Respondent at ANNEXURE-C respectively 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 circumstance of the case, including the cost of the Writ Petition, in the interest of justice and equity."
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 -4- NC: 2024:KHC:39559 WP No. 22653 of 2023 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 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 -5- NC: 2024:KHC:39559 WP No. 22653 of 2023 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", 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:-
-6-NC: 2024:KHC:39559 WP No. 22653 of 2023 "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 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) -7- NC: 2024:KHC:39559 WP No. 22653 of 2023 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.
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 -8- NC: 2024:KHC:39559 WP No. 22653 of 2023 Services vs. Joint Commissioner of Central Tax & others -
W.P.No.6138/2020 dated 03.09.2024.
(ii) The impugned Order at Annexure-B dated 09.01.2023 and Summary at Annexure-C dated 09.01.2023 are hereby quashed.
(iii) The parties are relegated to the stage of show cause notice dated 04.11.2022 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 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 MDS: List No.: 1 Sl No.: 79