Facts of the Case

The petitioner, Shri Mallanagouda, a civil contractor from Kajibilagi, Bagalkot District, Karnataka, holding GSTIN 29BX0PP9342L1ZG, filed a writ petition under Articles 226 and 227 of the Constitution seeking to strike down Section 16(4) of the CGST/SGST Act, 2017 read with Rule 61 of the KGST Rules and Rule 61(5)/Notification No.49/2019-Central Tax as unconstitutional, or alternatively read down as directory, and to quash a notice dated 17.03.2022 (C.No. IV/16/08/2021-22-TECH/321, DIN No. 20220357TC000000A158/321) issued by the Assistant Commissioner of Central Tax (GST), Bijapura Division (respondent no.1). The matter was heard by the Dharwad Bench on 17 November 2023.

Issues Involved

  1. Whether Section 16(4) of the CGST/SGST Act, 2017 and the related KGST Rules restricting the time limit for claiming input tax credit are unconstitutional.
  2. Whether the impugned notice dated 17.03.2022 could be quashed directly in writ jurisdiction.

Petitioner's Arguments

  • Challenged Section 16(4) and Rule 61(5) as illegal, unreasonable, arbitrary and discriminatory, violating Articles 14, 19 and 300A of the Constitution.
  • Sought, in the alternative, that the ITC time-limit provision be read down as directory rather than mandatory.
  • At the hearing, chose not to press the constitutional challenge or the read-down prayer, and placed this submission on record.

Respondent's Arguments

  • Section 16(4) of the CGST/SGST Act read with Rule 61(5) has already been upheld as constitutional in Thirumalakonda Plywoods v. The Assistant Commissioner (Andhra Pradesh High Court) and Gobinda Construction v. Union of India (Patna High Court).
  • Relied on the Supreme Court's decisions in Jayam and Company v. Assistant Commissioner, (2016) 15 SCC 125, and ALD Automotive Pvt. Ltd. v. Commercial Tax Officer, (2019) 13 SCC 225, upholding a similar time-limit restriction under the Tamil Nadu VAT Act.
  • Submitted that the constitutional challenge deserved to be rejected in light of these precedents.

Court Order/Findings

  • As the constitutional challenge was not pressed, the Court did not examine the validity of Section 16(4) or Rule 61(5).
  • The writ petition was disposed of without expressing any opinion on the merits of the impugned notice, leaving the petitioner at liberty to avail the statutory appellate remedy under the CGST/KGST Act.
  • Time spent in prosecuting the writ petition was directed to be excluded while computing limitation for any subsequent appeal or reply to the notice.

Important Clarification

  • A petitioner who withdraws a constitutional challenge to Section 16(4) of the CGST Act is relegated to the statutory appellate remedy rather than having the writ court decide the underlying ITC/notice dispute.
  • Courts consistently protect the litigant's limitation period by excluding time spent in the unsuccessful writ proceeding.
  • This is one of a series of near-identical orders passed by the same Bench on the same day disposing of Section 16(4) constitutional challenges once not pressed, reflecting a settled judicial approach following Thirumalakonda Plywoods and Gobinda Construction.

Sections Involved

  • Section 16(4), CGST Act, 2017 — prescribes the time limit for availing input tax credit.
  • Rule 61(5), KGST Rules, 2017 read with Notification No. 49/2019-Central Tax — procedural provisions tied to the ITC time-limit.
  • Articles 226 and 227, Constitution of India — writ jurisdiction invoked.

Decision – In Favour of

Disposed of with directions, without a finding for either side on merits — the petitioner retains liberty to pursue the statutory remedy against the notice; this is a procedural rather than 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. 104619 of 2022 (T-RES)
  • CNR: 2023:KHC-D:13444
  • Coram: Hon'ble Mr. Justice Anant Ramanath Hegde
  • Decision Date: 17 November 2023
  • Disposal Nature: Disposed of; constitutional challenge to Section 16(4) CGST/SGST Act not pressed, petitioner given liberty to avail statutory remedy under CGST/KGST Act

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