The Gujarat High Court issued the notices to the Government on a plea Challenging validity of Section 16(4) of the CGST Act, 2017.
The appellant, Surat Mercantile Association challenged the constitutional validity of Section 16(4) of the GST Act, 2017 on the ground of being manifestly arbitrary and violative of Articles 14, 19(1)(g) and 300A respectively of the Constitution.
In terms of section 16(4) of the GST Act. A taxpayer is not entitled to take ITC in respect of any invoice after the due date of furnishing of the return for the month of September following the end of financial year to which such invoice pertains or furnishing of the relevant annual return, whichever is earlier.
Mr. Vinay Shraff argued that the taxpayers cannot be made to suffer by not allowing the ITC on account of the failure on the part of the respondents to notify the Forms GSTR-2 and GSTR-3 respectively.
Mr. Shraff urged that the retrospective amendment in Rule 61 of the Rules is also unconstitutional being violative of Article 14 of the Constitution. It is also argued that the retrospective amendment to Rule 61(5) of the Rules and the deletion of Rule 61(6) of the Rules is unconstitutional being violative of Article 279A of the Constitution.
It was argued that if there is a delay in filing of the returns in the Form GSTR-3B from the due date of furnishing of the returns for the month of September following the end of the financial year or furnishing of the relevant annual returns, whichever is earlier, would render the Input Tax Credit time-barred, be quashed and set aside.
The learned counsel submitted that appropriate directions may be issued declaring that Section 39 of the Act does not bar filing of the returns without payment of tax and the GSTN portal not allowing furnishing of such returns without payment of tax be declared as arbitrary and unreasonable being violative of Article 14 of the Constitution of India.
The division bench of Justice J.B.Pardiwala and Ilesh J. Vora directed the service of notice on the respondents, which is returnable on 25th March 2021.
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