Facts of the Case

Shri Channaveeragouda, a contractor from Belagavi, filed a writ petition under Articles 226 and 227 challenging the constitutional validity of Section 16(4) of the CGST/SGST Act, 2017 read with Rule 61(5) of the KGST Rules, 2017, on grounds identical to a companion matter (WP No.102203 of 2023) heard the same day by the same Bench — that the time limit for availing input tax credit was arbitrary, discriminatory and violative of Articles 14, 19 and 300A, and should be struck down or read down as directory. The petition also sought quashing of an order dated 08.09.2022 (No.ACCT/LGSTO-390/US 73(9)/10/B-) passed by the Assistant Commissioner of Commercial Taxes, LGSTO-390, Belagavi.

Issues Involved

  1. Whether Section 16(4) of the CGST/SGST Act read with Rule 61(5) of the KGST Rules is unconstitutional as violative of Articles 14, 19 and 300A.
  2. Whether the impugned order dated 08.09.2022 is liable to be quashed on writ.

Petitioner's Arguments

  • The time limit prescribed under Section 16(4) for availing input tax credit is arbitrary, discriminatory and excessive, warranting it being struck down or read down as procedural/directory.
  • Rule 61(5) of the KGST Rules, introduced via Notification No.49/2019-Central Tax, is discriminatory and violative of Article 14.
  • The impugned order is unreasonable, oppressive, excessive and premeditated, violating Articles 14, 19 and 300A.

Respondent's Arguments

  • The constitutional validity of Section 16(4) read with Rule 61(5) already stood upheld by the Andhra Pradesh High Court in Thirumalakonda Plywoods vs The Assistant Commissioner, and by the Patna High Court in Gobinda Construction vs Union of India.
  • Similar time-limit provisions under the Tamil Nadu VAT Act were upheld by the Supreme Court in Jayam and Company vs Assistant Commissioner and ALD Automotive Pvt. Ltd vs Commercial Tax Officer.
  • The constitutional challenge deserved outright rejection in light of these precedents.

Court Order-Findings

  • Learned counsel for the petitioner submitted that the challenge to constitutional validity, and the alternative prayer to read down Section 16(4), would not be pressed.
  • Since the constitutional challenge was not pressed, the Court held it need not examine the validity of the provisions, and the petitioner must instead approach the appellate authority under the CGST/KGST Act regarding the impugned order.
  • The writ petition was disposed of without expressing anything on the merits of the impugned order.
  • Liberty was granted to avail the statutory remedy, with the time spent in the writ proceedings to be excluded while computing limitation for any appeal.

Important Clarification

  • Where a petitioner elects not to press a constitutional challenge to a GST provision, the writ court will not independently examine the underlying assessment order on merits and will instead relegate the party to the statutory appellate remedy, with the litigation period excluded from limitation.

Sections Involved

  • Section 16(4), CGST Act, 2017 — prescribes the time limit for availing input tax credit.
  • Rule 61(5), KGST Rules, 2017 — governs the manner and form for furnishing returns.
  • Section 73(9), CGST/KGST Act, 2017 — determination of tax, under which the impugned order was passed.

Decision-In Favour of

Neither party on merits — the writ petition was disposed of without expressing any opinion on the impugned order's validity, and the petitioner was left to pursue the statutory appellate remedy. This is a procedural disposal rather than a decision in favour of the assessee or the department.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Karnataka, Dharwad Bench
  • Case No.: WP No.104429 of 2022 (T-RES)
  • CNR: Not available
  • Coram: Hon'ble Mr Justice Anant Ramanath Hegde
  • Decision Date: 17-11-2023

Link to Download the Order

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