Order Date – 11 December 2023

Parties: M/s Jain Brothers Vs Union of India, Through its Secretary, Department of Revenue, State of Chhattisgarh, Through its Secretary, Commercial Tax-GST Department, Superintendent, Central GST & Central Excise, Range-IV, Assistant Commissioner, Central Goods and Services Tax and Principal Commissioner, Central Goods and Services Tax

Facts –

• The Petitioner, M/s Jain Brothers, a proprietorship firm filed a belated Form GSTR-3B for the month of March 2019 with late fee and interest applicable. The petitioner was eligible for ITC in terms of Section 16(2). Returns filed under Section 39 in Form GSTR-3B for the months of March, 2019 and April, 2019 have been annexed as Annexures P-2 & P-3.
• A show  cause notice was issued alleging that Input Tax Credit (ITC), is availed in contravention of Section 16(4) of the CGST Act along with interest under Section 50 of the said Act.
• Being aggrieved the petitioner challenge the constitutional validity of Section 16(4) of the CGST Act as violative of Articles 14, 19(1)(g) & 300A of the Constitution of India and further seeks a declaration that Section 16(4) is merely procedural in nature which cannot override substantive conditions as mandated under Sections 16(1) & 16(2) of the CGST Act, and eventually seeks to challenge the show cause notice.

Issue –

• Whether Section 16(4) of the CGST Act is violative of Articles 14, 19(1) (g) & 300A of the Constitution of India, as by Section 16(4) time limit for claiming ITC has been provided?

Order –

• The Divisional Bench of Hon’ble High Court observed that ITC is a nature of benefit or concession extended to the dealer and it can be availed by the beneficiary as per the scheme of the statute subject to fulfillment of the conditions laid down in Section 16(4) of the CGST Act. In that view of the matter, Section 16(4) cannot be held to be violative of Article 14 of the Constitution.
• Relying on the decision of their Lordships of the Supreme Court in the case of  Ashok Transport Agency v. Awadhesh Kumar held that the petitioner herein, which has filed the present writ petition, is only a proprietorship firm and not a citizen and therefore cannot claim protection of Article 19(1)(g).
• The next ground that has been raised on behalf of the petitioner that Section 16(4) of the CGST Act is violative of Article 300A of the Constitution of India, is also not at all made out, as Article 300A is ‘right to property’ which is the constitutional right and clearly provides that it cannot be taken away except in accordance with law.
• Accordingly the writ petition is dismissed.