Facts of the Case

Petitioner Prakash Mayappa Jambagi, a civil contractor registered under GST (GSTIN 29ARIPJ9069P1ZP), filed a writ petition under Articles 226 and 227 challenging the constitutional validity of Section 16(4) of the CGST/KGST Act, 2017, which fixes a time limit for claiming input tax credit, read with Rule 61(5) of the KGST Rules, 2017. He also challenged a demand notice dated 26.12.2021 issued by the Assistant Commissioner of Commercial Taxes, LGSTO-430, Jamkhandi, disallowing input tax credit on the ground of delay. The petition impleaded the State of Karnataka, the Union of India, the GST Council and the Principal Chief Commissioner of Central Tax as respondents.

Issues Involved

  1. Whether Section 16(4) of the CGST/KGST Act, 2017 read with Rule 61(5) of the KGST Rules, prescribing a time limit for availing input tax credit, is unconstitutional as violative of Articles 14, 19 and 300A.
  2. Whether, in the alternative, the time limit should be read down as directory rather than mandatory.
  3. What relief remained available to the Petitioner once the constitutional challenge was not pressed.

Petitioner's Arguments

  • Section 16(4) of the CGST/KGST Act and Rule 61(5) of the KGST Rules were illegal, unreasonable, arbitrary and discriminatory, violating Articles 14, 19 and 300A of the Constitution.
  • In the alternative, the time limit for availing ITC should be read down as procedural and directory rather than mandatory.
  • The demand notice dated 26.12.2021 issued pursuant to these provisions was unreasonable, arbitrary, oppressive and premeditated.
  • At the hearing, counsel submitted that the challenge to constitutional validity and the alternative prayer to read down the provisions would not be pressed.

Respondent's Arguments

  • Counsel for the respondents jointly submitted that the constitutional validity of Section 16(4) CGST/SGST Act read with Rule 61(5) had already been upheld in Thirumalakonda Plywoods v. The Assistant Commissioner (Andhra Pradesh High Court) and Gobinda Construction v. Union of India (Patna High Court).
  • Reliance was also placed on the Supreme Court's rulings in Jayam and Company v. Assistant Commissioner, (2016) 15 SCC 125, and ALD Automotive Private Limited v. Commercial Tax Officer, (2019) 13 SCC 225, upholding similar time-limit provisions under the Tamil Nadu VAT Act.
  • It was submitted that, in light of these precedents, the challenge to constitutional validity ought to be rejected.

Court Order/Findings

  • Since the Petitioner did not press the challenge to constitutional validity or the alternative prayer to read down Section 16(4), the Court held it need not examine the constitutional validity of the provisions.
  • Once those prayers were excluded, the Court held that the validity of the impugned demand notice had to be examined by the statutory appellate authority, and the Petitioner was relegated to that remedy under the CGST/KGST Act.
  • The writ petition was disposed of without expressing anything on the merits of the impugned order or show-cause notice, with liberty to the Petitioner to avail the statutory remedy.
  • The Court directed that the time spent in prosecuting the writ petition be excluded while computing the limitation period for filing an appeal or responding to the notice.

Important Clarification

  • Where a constitutional challenge to a GST provision is not pressed in light of existing appellate precedent upholding it, the writ court will not independently examine the provision's validity and will relegate the petitioner to the statutory remedy.
  • Time spent pursuing an unsuccessful or withdrawn writ challenge is liable to be excluded while computing the limitation period for filing a statutory appeal — a protection petitioners should specifically seek when withdrawing a writ.

Sections Involved

  • Section 16(4) of the Central Goods and Services Tax Act, 2017 and the corresponding Karnataka GST Act provision — prescribes the time limit within which input tax credit must be claimed.
  • Rule 61(5) of the Karnataka Goods and Services Tax Rules, 2017 — procedural rule connected with the time limit for availing ITC.
  • Articles 14, 19, 226, 227 and 300A of the Constitution of India, 1950 — invoked respectively for equality, freedom, writ jurisdiction and protection of property.

Decision – In Favour of

Disposed of with directions and no finding on merits. The constitutional challenge was not pressed and the Court expressed no view on the impugned demand notice, relegating the Petitioner to the statutory appellate remedy — a procedural, not a substantive, outcome.

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. 102880 of 2022 (T-RES)
  • CNR: 2023:KHC-D:13418
  • Coram: Justice Anant Ramanath Hegde
  • Decision Date: 17-11-2023
  • Disposal Nature: Disposed of (constitutional challenge not pressed; relegated to statutory appellate remedy)

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