Facts of the Case

The petitioner, Mallappa, a contractor registered under GSTIN 29AOSPM9718H1Z3, filed a writ petition before the Dharwad Bench of the Karnataka High Court challenging the constitutional validity of Section 16(4) of the Central Goods and Services Tax/State Goods and Services Tax Act, 2017 read with Rule 61(5) of the Karnataka GST Rules, which prescribes the outer time-limit for availing input tax credit. The petitioner also impugned a specific notice dated 26.12.2021 issued by the Assistant Commissioner of Commercial Taxes, LGSTO-430, Jamkhandi. The matter was decided by Justice Anant Ramanath Hegde on 17.11.2023, along with a companion petition raising the identical constitutional question.

Issues Involved

  1. Whether Section 16(4) of the CGST/SGST Act, 2017 read with Rule 61(5) of the KGST Rules is unconstitutional as arbitrary, unreasonable and discriminatory.
  2. Whether, once the constitutional challenge is given up, the writ court should still examine the merits of the impugned notice.
  3. What recourse remains open to the petitioner against the impugned order/notice.

Petitioner's Arguments

  • Initially contended that Section 16(4) read with Rule 61(5) of the KGST Rules was illegal, arbitrary and discriminatory, violating Articles 14, 19 and 300A of the Constitution, and sought in the alternative that the ITC time-limit be read down as merely directory.
  • In light of coordinate High Court rulings upholding near-identical provisions, ultimately chose not to press the constitutional challenge or the alternative "read down" prayer.

Respondent's Arguments

  • The constitutional validity of Section 16(4) of the CGST/SGST Act read with Rule 61(5) had already been upheld by the Andhra Pradesh High Court in Thirumalakonda Plywoods and by the Patna High Court in Gobinda Construction, following Supreme Court precedent on analogous VAT time-limit provisions in Jayam and Company and ALD Automotive.
  • Since the provision stood constitutionally validated, any grievance against the impugned notice ought to be pursued through the statutory remedy under the CGST/KGST Act rather than by writ.

Court Order/Findings

  • Since the petitioner did not press the constitutional challenge or the alternative prayer to read down Section 16(4)/Rule 61(5), the Court held there was no occasion to examine the vires of the provisions.
  • Once a constitutional challenge to a GST provision is not pressed, the writ court will not independently adjudicate the underlying notice or order on merits and will relegate the assessee to the statutory appellate remedy.
  • The writ petition was disposed of without expressing any opinion on the merits of the impugned order or show cause notices, with liberty granted to the petitioner to avail the statutory remedy under the CGST/KGST Act.
  • As a further liberty, the time spent in prosecuting the writ petition was directed to be excluded while computing the limitation period, if any, for filing an appeal or responding to the notices.

Important Clarification

The constitutionality of Section 16(4)'s input tax credit time-limit has already been upheld by coordinate High Courts following Supreme Court precedent on analogous provisions; assessees challenging individual notices founded on that provision should ordinarily pursue the statutory appellate remedy, with the benefit of limitation-exclusion for time spent in the writ proceedings, rather than mount a fresh constitutional challenge.

Sections Involved

  • Section 16(4) of the Central Goods and Services Tax Act, 2017 – prescribes the outer time-limit for availing input tax credit for a financial year.
  • Rule 61(5) of the Karnataka Goods and Services Tax Rules, 2017 – procedural rule connected with return filing relevant to ITC claims.
  • Article 226 of the Constitution of India – writ jurisdiction invoked to challenge vires, but ultimately not adjudicated on merits.

Decision – In Favour of

This was disposed of with directions and no finding on merits; it does not cleanly favour either side. The constitutional challenge was withdrawn by the petitioner and no relief was granted on the impugned notice itself — the only accommodation was procedural, being exclusion of the writ-petition period from limitation for pursuing the statutory remedy.

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.: Writ Petition No. 102885 of 2022 (T-RES)
  • CNR: Not available
  • Coram: Justice Anant Ramanath Hegde
  • Decision Date: 17-11-2023
  • Disposal Nature: Disposed of without expressing opinion on merits; liberty to pursue statutory remedy

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