Writ Petition No. 14326 of 2023 · The High Court
Case Details
- 1 - NC: 2025:KHC:13384 WP No. 14326 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.14326 OF 2023 (T-RES) BETWEEN: M/S AKASH INDUSTRIES REP. BY ITS PROPRIETOR, SRI VENKATESH, AGED ABOUT 42 YEARS, NO.20, 9TH CROSS, RAJAGOPAL NAGAR MAIN ROAD, PEENYA 2ND STAGE, BENGALURU – 560 058. (BY SRI. VISWANATH PATIL, ADVOCATE) AND: …PETITIONER 1. THE UNION OF INDIA REPRESENTED BY ITS FINANCE SECRETARY, MINISTRY OF FINANCE, MINISTER OF REVENUE, NEW DELHI – 110 001. 2. THE STATE OF KARNATAKA REPRESENTED BY ITS FINANCE SECRETARY, VIDHANA SOUDHA, BENGALURU – 560 001. Digitally signed by CHANDANA B M Location: High Court of Karnataka 3. THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA VANIJYA THERIGE KARYALAYA, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU – 560 009 4. THE COMMERCIAL TAX OFFICER LGSTO-076, 2ND FLOOR, 4TH PHASE, KIADB BUILDING, - 2 - NC: 2025:KHC:13384 WP No. 14326 of 2023 14TH CROSS, PEENYA 2ND STAGE, BENGALURU – 560 058. …RESPONDENTS
Legal Reasoning
(BY SRI. B. PRAMOD, CGC FOR R-1; SRI. K. HEMA KUMAR, AGA FOR R-2 TO R-4) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARE A STRIKE DOWN SECTION 16(4) AND THE PROVISO OF THE CGST / SGST ACTS AS BEING UNCONSTITUTIONAL THE SAME BEING VIOLATIVE OF ARTICLES 14 AND 19(1)(G) OF THE CONSTITUTION OF INDIA AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks the following reliefs:- "(a) The petitioner most respectfully prays that this Hon’ble High Court may be pleased to declare an strike down Section 16(4) and proviso of the CGST/SGST Acts as being unconstitutional, the same being violative of Articles 14 and 19(1)(g) of the Constitution of India. (b) The petitioner most respectfully prays that this Hon’ble High court may be pleased to issue a wit of certiorari quashing the
Decision
order of adjudication bearing No. CTO/LGSTO/76Adj/12/2023-24 dated 01.06.2023 passed by the 4th Respondent under the Provisions of the CGST/SGST/IGST/Acts for the tax periods from July 2017 to March 2018 (Annexure-B). - 3 - NC: 2025:KHC:13384 WP No. 14326 of 2023 (c) This Hon’ble High Court may be pleased to issue such other writ or writs or directions in the nature of a writ as this Hon’ble High Court may deem fit to grant in the facts and circumstances of the petitioner’s case.” 2. Heard learned counsel for the petitioner and learned CGC for respondent No.1 and learned AGA for respondent Nos.2 to 4 and perused the material on record. 3. A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in the case of M/s.Sadhana Enviro Engineering Services vs. Joint Commissioner of Central Tax & others – W.P.No.6138/2020 dated 03.09.2024, which reads as under:- 2. Heard learned Senior counsel for the petitioner and learned counsel for the respondents – revenue and learned AGA for the State and perused the material on record. 3. Learned Senior counsel for the petitioner submitted that though several contentions have been urged by the petitioner who has also sought for various reliefs, during the pendency of the present petition, a new provision i.e., Section 16(5) has been inserted by “The Finance (No.2) Act, 2024” vide Central Act 15 of 2024, in which, Clause No.118 provides for condonation of delay in - 4 - NC: 2025:KHC:13384 WP No. 14326 of 2023 availment of credit and extended the time limit by providing that for supplies pertaining to the financial years 2017-18, 2018-19, 2019-20 and 2020-21, the petitioner would be entitled to avail / claim credit in any return filed up to 30.11.2021. It is submitted that the said “The Finance (No.2) Act, 2024” received presidential asset on 16.08.2024 and would be notified shortly. It was further submitted that in cases where assessees had paid amounts as pre-deposit under court orders or in appeal proceedings or amounts recovered by the respondents – revenue are paid by the assessees pursuant to recovery proceedings, the embargo contained in Clause 150 of the said “The Finance (No.2) Act, 2024” would not apply and was not applicable to the assessees, who would not be covered by the said embargo and consequently, they would be entitled to refund of the said amounts. It is therefore submitted that without going into the various other contentions urged by the petitioner and reliefs sought for by it and without expressing any opinion on the same, the present petition may be disposed of with a direction to consider and implement and give effect to the amended provisions contained in Section 118 of “The Finance (No.2) Act, 2024” relating to insertion of Section 16(5) to the CGST Act / KGST Act within a stipulated time frame. 4. Per contra, learned counsel for the respondents – revenue and learned AGA for the respondents – State jointly and fairly submit that it is true that Section 16(5) was inserted vide Clause 118 of “The Finance (No.2) Act, 2024” and that the same was applicable to the petitioner and - 5 - NC: 2025:KHC:13384 WP No. 14326 of 2023 other assessees and the time for filing returns and availing input tax credit would stand extended upto 30.11.2021. It is also submitted that since presidential asset has already been received to “The Finance (No.2) Act, 2024”, necessary Notification would be issued shortly and as such, the present petition may be disposed of accordingly. 5. As rightly contended by the learned Senior counsel for the petitioner as well as learned counsel for the respondents – revenue and learned AGA for the State, Section 16(5) was inserted into the CGST Act vide Clause 118 of the “The Finance (No.2) Act, 2024”, which reads as under:- “118. In Section 16 of the Central Goods and Services Act, with effect from the 1st day of July, 2017, after sub-section(4), the following sub-sections shall be inserted, namely:- (5) Notwithstanding anything contained in sub- section(4), in respect of an Invoice or Debit note for supply of goods or services or both pertaining to the financial years, 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under Section 39 which is filed up to the thirtieth day of November, 2021. (6) xxxxxxxxxxxxx (i) xxxxxxxxxxxxxx (ii)xxxxxxxxxxxxxx ” 6. In view of the aforesaid amendment by inserting Section 16(5) to the CGST / KGST Act, the present petition deserves to be disposed of relegating the parties to the - 6 - NC: 2025:KHC:13384 WP No. 14326 of 2023 original authority to implement and give effect to the said provisions after providing sufficient and reasonable opportunity to the petitioner and hearing them and proceed further in accordance with law and by issuing certain directions in this regard. 7. In the result, I pass the following:- ORDER (i) Petition is hereby disposed of. (ii) The parties are relegated to the stage of show cause notice at Annexure-C dated 13.02.2020 issued by the respondent(s) and the respondents are directed to give effect to and implement the amended provisions contained in Section 118 of “The Finance (No.2) Act, 2024” relating to insertion of Section 16(5) to the CGST Act / KGST Act by providing sufficient and reasonable opportunity and hear the petitioner and proceed further in accordance with law within a period of one month from the date of receipt of a copy of this order. (iii) The impugned blocking of the Input Tax Credit (ITC) ledger of the petitioner vide Annexure-F dated 03.02.2020 is hereby quashed. (iv) The respondents are directed to unblock and release the credit balance of the petitioner in their ITC Ledger / Account, if not already released, immediately / forthwith upon receipt of a copy of this order without any delay. (v) All rival contentions on all other prayers sought for by the petitioner including the challenge to the statutory - 7 - NC: 2025:KHC:13384 WP No. 14326 of 2023 provisions are kept open and no opinion is expressed on the same. 4. In view of the aforesaid facts and circumstances and the judgment of this Court in M/s.Sadhana Enviro Engineering’s case supra, I am of the view that the present petition also deserves to be allowed and disposed of in terms of the said judgment. 5. In the result, I pass the following:- ORDER (i) Petition is hereby disposed of in terms of the judgment of this Court in the case of M/s.Sadhana Enviro Engineering Services vs. Joint Commissioner of Central Tax & others – W.P.No.6138/2020 dated 03.09.2024. (ii) The impugned Order at Annexure-B dated 01.06.2023 is hereby quashed. (iii) The parties are relegated to the stage of show cause notice dated 27.04.2023 issued by the respondent(s) and the respondents are directed to give effect to and implement the amended provisions contained in Section 118 of “The Finance (No.2) Act, 2024” relating to insertion of Section 16(5) to the CGST Act / KGST Act by providing sufficient and reasonable opportunity - 8 - NC: 2025:KHC:13384 WP No. 14326 of 2023 and hear the petitioner and proceed further in accordance with law within a period of one month from the date of receipt of a copy of this order. (iv) All rival contentions on all other prayers sought for by the petitioner including the challenge to the statutory provisions are kept open and no opinion is expressed on the same. Sd/- (S.R.KRISHNA KUMAR) JUDGE SV List No.: 1 Sl No.: 82