Judgment 04062024 KHC 16 2 C and 16 4240607122954 543592

2024:KER:37752
IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT
THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

WP(C) NO. 31559 OF 2019
PETITIONER:
M/S M.TRADE LINKS

FA TOWER, K.K.ROAD,KADAVANTHRA, ERNAKULAM, REPRESENTED BY
NIYAS AHAMMED, MANAGING PARTNER.
BY ADVS.
SMT.MEERA V.MENON
RESPONDENTS:
1 UNION OF INDIA
REPRESENTED BY SECRETARY TO GOVERNMENT, MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE), NORTH BLOCK, NEW DELHI-110001.
2 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS,
GST POLICY WING, NORTH BLOCK, NEW DELHI-110001, REPRESENTED
BY PRINCIPAL COMMISSIONER (GST).
3 STATE OF KERALA,
REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPT., GOVT.
SECRETARIAT, THIRUVANANTHAPURAM-695001.
BY ADV SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE &AMP;
CUSTOMS
SRI. MUHAMED RAFIQ-SPL.GP, SRI.P.R. SREEJITH -SC, GSTN,
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08.11.2023,

ALONG WITH WP(C).5995/2022, 21545/2022 AND CONNECTED CASES, THE COURT ON
04.06.2024 DELIVERED THE FOLLOWING:
W.P(C) Nos. 31559/2019, 25891/2020, 26515/2021,5995/2022, 2024:KER:37752
21545/2022, 27854/2022, 24327/2022, 36612/2022, 24677/2023,
37039/2023
2

PRESENT
WP(C) NO. 25891 OF 2020

PETITIONER:
PUTHANANGADI INDUSTRIES
VI/70, INDUSTRIAL DEVELOPMENT PLOT, CHAMBANNOOR P.O.,
ANGAMALI, ERNAKULAM-683573, REPRESENTED BY ITS MANAGING
PARTNER TITTO THOMAS.
BY ADVS.
K.P.PRADEEP
SHRI.HAREESH M.R.
SRI.T.T.BIJU
SMT.T.THASMI
RESPONDENTS:
1 THE STATE OF KERALA
REPRESENTED BY ITS SECRETARY(TAXES), GOVERNMENT
SECRETARIAT, THIRUVANANTHAPURAM, KERALA-695001.
2 COMMISSIONER OF KERALA STATE GST,
KERALA STATE GST DEPARTMENT, TAX TOWERS, KILLIPALAM,
KARAMANA P.O., THIRUVANANTHAPURAM, KERALA-695002.
3 STATE TAX OFFICER,
ANGAMALY, KERALA STATE GOODS AND SERVICE TAX DEPARTMENT,
ANGAMALY P.O., ERNAKULAM-683572.
4 CHIEF COMMISSIONER OF CENTRAL TAXES,
((CGST) AND CENTRAL EXCISE), CENTRAL REVENUE BUILDINGS,
I.S.PRESS ROAD, COCHIN, ERNAKULAM-682018.
5 GOODS AND SERVICE TAX COUNCIL,
GOVERNMENT OF INDIA, OFFICE OF THE GST COUNCIL
SECRETARIAT, 5TH FLOOR, TOWER II, JEEVAN BHARTI
BUILDING, JANPATH ROAD, CONNAUGHT PLACE, NEW DELHI-
110001, REPRESENTED BY ITS ADDITIONAL SECRETARY.
6 GOODS AND SERVICES TAX NETWORK,
EAST WING, 4TH FLOOR, WORLD MARK-1, AEROCITY, NEW DELHI-
110037, REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER.
7 UNION OF INDIA,
REPRESENTED BY ITS SECRETARY, DEPARTMENT OF REVENUE,
MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK,
NEW DELHI-110001.
8 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS-DEPARTMENT
OF REVENUE,
NEW DELHI-110001, REPRESENTED BY ITS CHAIRMAN.
9 MR.LIJU JOSE,
ANNA PLASTICS, 10/585 A, THATHAPILLY, MANNAM, NORTH
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PARAVUR, ERNAKULAM-683520.
BY ADVS.
SRI.P.R.SREEJITH, SC, CENTRAL BOARD OF EXCISE AND
CUSTOMS
ADV SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE
&AMP; CUSTOMS
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

08.11.2023, ALONG WITH WP(C).31559/2019 AND CONNECTED CASES, THE
COURT ON 04.06.2024 DELIVERED THE FOLLOWING:
W.P(C) Nos. 31559/2019, 25891/2020, 26515/2021,5995/2022, 2024:KER:37752
21545/2022, 27854/2022, 24327/2022, 36612/2022, 24677/2023,
37039/2023
4

PRESENT
WP(C) NO. 26515 OF 2021

PETITIONER:
MKHK TECHSTREAM PRIVATE LIMITED

1ST FLOOR. 1/3459 Q M.T.I COMPLEX, KANNUR ROAAD,
WESTHILL, KOZHIKODE-673 005 .REPRESENTED BY ITS MANAGING
DIRECTOR, HARIS IBRAHIM
BY ADVS.
K.P.ABDUL AZEES
AKHIL SURESH
T.ARCHANA
RESPONDENTS:
1 INFINITE TECHNOLOGY SOLUTIONS

MERLIN INFINITE, 10TH FLOOR, PLOT NO 51, BLOCK DN,
SECTOR-V, BIDHAANAGAR, IN THE DISTRICT OF NORTH 24
PARGANAS WITHIN STATIONS ELECTRONICS COMPLEX SALT LAKE
CITY, KOLKATTA-700091
2 UNION OF INDIA
REPRESENTED BY REVENUE SECRETARY, NORTH BLOCK, NEW
DELHI-110 001
3 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS,
DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NEW DELHI-
110 001
4 STATE OF KERALA,
REPRESENTED BY SECRETARY, TAXES DEPARTMENT, GOVERNMENT
SECRETARIAT, THIRUVANANTHAPURAM -695 001.
1ST CIRCLE, STATE GST COMPLEX, KOZHIKODE-673 004
BY ADVS.
SRI. MUHAMED RAFIQ-SPL.GP
&AMP; CUSTOMS.

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PRESENT
WP(C) NO. 5995 OF 2022

PETITIONER:
M/S.LALUKKAS MOBILES
VI/1227, PAMPADY, KOTTAYAM - 686502, REPRESENTED BY ITS
PROPRIETOR, SRI. BYJOO PUTHANPARAMPIL SUKUMARAN.
BY ADVS.
AJI V.DEV
ALAN PRIYADARSHI DEV
S.SAJEEVAN
RESPONDENTS:
1 THE ASSISTANT COMMISSIONER

STATE GOODS & SERVICES TAX DEPARTMENT, 2ND CIRCLE,
KOTTAYAM - 686001.
2 UNION OF INDIA
REPRESENTED BY ITS SECRETARY (REVENUE), MINISTRY OF
FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI -
110001.
3 THE CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS
REPRESENTED BY ITS CHAIRMAN, DEPARTMENT OF REVENUE,
NORTH BLOCK, NEW DELHI - 110001.
4 THE STATE OF KERALA
REPRESENTED BY ITS SECRETARY TAXES, SECRETARIAT,
THIRUVANANTHAPURAM - 695001.
BY ADV SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE
&AMP; CUSTOMS
SRI. MUHAMED RAFIQ-SPL.GP, SRI.P.R. SREEJITH -SC, GSTN,

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PRESENT
WP(C) NO. 21545 OF 2022
PETITIONER:
M/S. ULTRAPRIME CEMENTS INDIA PVT. LTD.,

23/22-B, PATTASSERIL, BHS ROAD, TRIPUNITHURA - 682 301,
ERNAKULAM DISTRICT, REPRESENTED BY ITS MANAGING DIRECTOR
ARUN JIMMY.
BY ADV TOMSON T.EMMANUEL
RESPONDENTS:
1 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS ,
MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NEW DELHI -
110 023, REPRESENTED BY ITS UNDER SECRETARY.
2 STATE OF KERALA
REPRESENTED BY ITS SECRETARY, DEPARTMENT OF TAXES,
SECRETARIAT, THIRUVANANTHAPURAM - 695 001.
3 COMMISSIONER OF STATE TAX
STATE GOODS AND SERVICE TAX DEPARTMENT, 9TH FLOOR, TAX
TOWER, KILLIPALAM, KARAMANA P.O., THIRUVANANTHAPURAM - 695
001.
4 STATE TAX OFFICER
STATE GST DEPARTMENT, 1ST CIRCLE, THRIPUNITHURA - 682 301.
5 THE COMMISSIONER OF CUSTOMS (IMPORTS)
OFFICE OF THE COMMISSIONER OF CUSTOMS, CUSTOM HOUSE,
WILLINGTON ISLAND, COCHIN - 682 009.
6 THE DEPUTY COMMISSIONER
CUSTOM HOUSE, WILLINGTON ISLAND, COCHIN - 682 009.
7 THE DIRECTOR(ICD)
CENTRAL BOARD OF EXCISE AND CUSTOMS, ROOM NO.49, NORTH
BLOCK, NEW DELHI.
BY ADV SMT.PREETHA S. NAIR, SC, CENTRAL BOARD OF EXCISE
AND CUSTOMS
ADV SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE &AMP;
CUSTOMS.

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PRESENT
WP(C) NO. 27854 OF 2022

PETITIONER:
YOHANAN THYPARAMPIL EASOW,

VI/445, THYPARAMBIL HOUSE, KEEKOZHUR, PIN - 689672
BY ADVS.
K.S.HARIHARAN NAIR
HARIMA HARIHARAN
G.REMADEVI
RAJATH R NATH
RESPONDENTS:

OFFICE OF THE STATE TAX OFFICER (WC), SGST DEPT, MINI
CIVIL STATION, PATHANAMTHITTA, PIN - 689645
2 UNION OF INDIA
REPRESENTED BY SECRETARY, DEPARTMENT OF REVENUE,
NEW DELHI, PIN - 110001
BY ADV SREEJITH P. R, SC, GSTN

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PRESENT
WP(C) NO. 24327 OF 2022

PETITIONER/S:
P.J. GEORGE( PROPRIETOR)

M/S JANATHA AGENCIES, ALAPPATT PALATHINGAL HOUSE,
IRINJALAKKUDE, THRISSUR., PIN - 680121
BY ADV P.N.DAMODARAN NAMBOODIRI
RESPONDENTS:
1 UNION OF INDIA
REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE, NEW DELHI., PIN - 110023
2 STATE OF KERALA
REPRESENTED BY ITS SECRETARY, DEPARTMENT OF TAXES,
SECRETARIAT, THIRUVANATHAPURAM., PIN - 695001
3 COMMISSIONER
STATE GOODS AND SERVICE TAX DEPARTMENT,9TH FLOOR, TAX
TOWER, KILLIPALAM, KARAMANA, P.O., THIRUVANATHAPURAM,
PIN - 695001
4 STATE TAX OFFICER
STATE GST DEPARTMENT, O/O STATE GOODS AND SERVICES TAX
DEPARTMENT, IRINJALAKUDA, THRISSUR, PIN - 680121
BY ADV MALINI K. MENON, CGC

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PRESENT

WP(C) NO. 36612 OF 2022
PETITIONER:
SALAHUDHEEN
KAPPAKASSERIL STORES, NEAR PARK JUNCTION, KAYAMKULAM -
690502, ALAPPUZHA DISTRICT., PIN - 690502
BY ADV A.KRISHNAN
RESPONDENTS:
1 STATE TAX OFFICER

STATE GOODS & SERVICE TAX DEPARTMENT, MINI CIVIL
STATION, KAYAMKULAM, ALAPPUZHA DISTRICT, PIN - 690502
2 JOINT COMMISSIONER APPEALS II
STATE GOODS & SERVICE TAX DEPARTMENT, KOLLAM, PIN -
691002
3 UNION OF INDIA
REPRESENTED BY SECRETARY TO GOVERNMENT, MINISTRY OF
FINANCE (DEPARTMENT OF REVENUE), NORTH BLOCK, NEW DELHI,
PIN - 110001
4 CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS,
GST POLICY WING, NORTH BLOCK, NEW DELHI - 110 001,
REPRESENTED BY PRINCIPAL COMMISSIONER (GST), PIN -
110001
5 STATE OF KERALA
REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPT.,
GOVT. SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
BY ADVS.
SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE &AMP;
CUSTOMS

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PRESENT
WP(C) NO. 24677 OF 2023

PETITIONER:
CHALLIYIL VIJAYAN SHAN

II, 568, PARAMBIKKULANGARA, METHALA, THRISSUR, PIN -
680669
BY ADVS.
K.N.SREEKUMARAN
P.J.ANILKUMAR (A-1768)
N.SANTHOSHKUMAR
RESPONDENTS:
1 ASSISTANT COMMISSIONER (WC & LT)

WORKS CONTRACT, STATE GOODS & SERVICE TAX DEPARTMENT
POOTHOLE, THRISSUR, PIN - 680004
2 DEPUTY COMMISSIONER
ARREAR RECOVERY, TAX PAYER SERVICES, STATE GOODS &
SERVICE TAX DEPARTMENT, POOTHOLE, THRISSUR, PIN - 680004
3 COMMISSIONER OF STATE GOODS & SERVICE TAX DEPARTMENT
TAX TOWER, 9TH FLOOR, KILLIPPALAM, KARAMANA-P.O,
THIRUVANANTHAPURAM-, PIN - 695002
4 STATE OF KERALA REPRESENTED BY ADDITIONAL CHIEF
SECRETARY (TAXES)
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
5 UNION OF INDIA, REPRESENTED BY ITS SECRETARY
DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT
OF INDIA, NORTH BLOCK, NEW DELHI, PIN - 110001

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PRESENT

WP(C) NO. 37039 OF 2023
PETITIONER/S:
M/S. MALL OF JOY PVT LIMITED,

AGED 42 YEARS
9/590-39 NEAR SAKTHAN STAND THRISSUR REPRESENTED BY ITS'
DIRECTOR, SHRI. TENSON. T.T, PIN - 680001
BY ADVS.
A.KUMAR
P.J.ANILKUMAR
G.MINI(1748)
P.S.SREE PRASAD
RESPONDENTS:
1 UNION OF INDIA
THROUGH ITS SECRETARY (REVENUE), MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE,GOVERNMENT OF INDIA, NORTH BLOCK,
NEW DELHI G.P.O., PIN - 110001
2 STATE OF KERALA,
REPRESENTED BY ITS SECRETARY (TAXES), DEPARTMENT OF
FINANCE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN
- 695001
3 ASSISTANT COMMISSIONER
OFFICE OF THE ASSISTANT COMMISSIONER OF CENTRAL TAX AND
CENTRAL EXCISE THRISSUR DIVISION, THRISSUR, PIN - 680021
4 THE SUPERINTENDENT,
CENTRAL TAX AND CENTRAL EXCISE THRISSUR DIVISION,
THRISSUR, PIN - 680021
BY ADVS.
&AMP; CUSTOMS.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08.11.2023,
ALONG WITH WP(C).31559/2019 AND CONNECTED CASES, THE COURT ON
04.06.2024 DELIVERED THE FOLLOWING:

W.P(C) Nos. 31559/2019, 25891/2020, 26515/2021,5995/2022, 2024:KER:37752
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JUDGMENT ‘CR’
[W.P(C) Nos. 31559/2019, 25891/2020,
26515/2021,5995/2022,21545/2022,
27854/2022, 24327/2022, 36612/2022,
24677/2023, 37039/2023]
In the present batch of writ petitions, challenge has
been made to Sections 16(2)(c) and 16(4) of the Central
Goods and Services Tax Act and State Goods and
Services Act, 2017.
Background:
2. It took 13 long years, i.e., 2004-2017, for Goods
and Services Tax to finally arrive in India, and a new tax
regime could see the light of the day with effect from
01.07.2017. The Kelkar Committee used the word ‘GST’
for the first time in a formal document, i.e., the Executive
Summary of the Kelkar Committee report. The Kelkar
Committee proposed that the Union and the States should
concurrently tax the consumption of almost all goods and
services in the economy, and it should be based on the
principles of Value Added Tax (for short ‘the VAT’). All
existing legislation taxing goods and services with
cascading effects should be withdrawn. The GST would
subsume existing indirect taxes including central excise
and service tax.

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2.1 ‘A White Paper on State-Level Value Added Tax’
(‘the white paper’) was published by the Empowered
Committee of the
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State Finance Ministers on 17.01.2005. The ‘White
Paper’ discussed features such as Input Tax Credit (‘the
ITC’ for short), multiplicity of rates and taxes, etc., and
provides uniform taxes and rates. In the budget speech
for the Financial Year 2006-2007, the then Finance
Minister announced a large consensus on a national
goods and services tax. An empowered committee was
constituted to prepare a road map for a National GST.
In the budget speech of the Union Finance Minister
2009-2010, GST was considered as a dual tax structure
consisting of central GST and State GST, legislated and
administrated by the Central and States, respectively.
3. The 13th Finance Commission also made
recommendations on Central and State GST. The
Commission on Central – State Relations 2010, headed by
former Chief Justice of India, Madan Mohan Punchi J,
broadly agreed with the suggestions and the
recommendations of the 13th Finance Commission. The
Central-State relation Commission recommended the
concurrent levy of dual GST by the Central and the States
on a common tax base.
4. The Constitution (115th Amendment) Bill 2011
was introduced in the Lok Sabha to provide the legal and

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constitutional structure for rolling out GST and empower
the Central and States to levy dual GST on a common tax
base. However, before the

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Standing Committee report could be considered, the 15th
Lok Sabha was dissolved, and the Bill lapsed.
5. The second attempt was made by introducing
the 122nd Amendment Bill in 2014, the said Bill was
passed on 08.08.2016, received the Presidential assent
and became the Constitution (101st Amendment) Act
2016.
6. Article 246-A was inserted, providing the
establishment of the Goods and Services Tax Council,
which came into force on 12.09.2016 to provide a
constitutional mandate for legislation of the GST Act.
The remaining Sections of the Constitution (101 st
Amendment) Act 2016 came into force with effect
from 16.09.2016.
7. The President of India Constituted the Goods
and Services Tax Council (GST Council) on 15.09.2016.
The GST Council was to make recommendations to the
Union and the States inter-alia on model Goods and
Services Tax Laws, principles of levy, apportionment of
Goods and Services Tax levied on supplies in the course
of inter-state trade and commerce and principles that
govern the place of supply. The GST Council prepared
the model GST law, model IGST law, and GST

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compensation law. With some modifications, those model
GST laws prepared by the GST Council became the draft
for the Central Goods and Services Tax Bill, the
Integrated Goods and Services

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Tax Bill, the Union Territory Goods and Services Tax Bill,
the Goods and Services Tax (Compensation to States) Bill
and State Goods and Services Tax Bill. These Bills were
debated and passed by the Lok Sabha, and thus, the
Central Goods and Services Tax Act, the Integrated Goods
and Services Tax Act, the Union Territory Goods and
Services Tax Act and the Goods and Services Tax
(Compensation to States) Act came into life.
8. The GST laws have been enacted to overcome
the difficulties of the multiple tax regimes and to get
away from the tariff and non-tariff barriers such as entry
tax, check post, etc., which would hinder the free flow of
trade throughout the Country. The earlier tax regimes of
the States would divide the country into separate
economic spheres, and a larger number of taxes would
create high compliance costs for the taxpayers besides
cascading effects on the value of goods to the consumers.
Under the new tax regime, all earlier taxes, such as
sales tax and other taxes, would get subsumed in a
single tax called the Goods and Services Tax, which
would be levied on the supply of the goods or services
or both at each stage of supply starting from manufacture
or import until the last retail level. The GST Act confers
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the power upon the Central Government to levy goods
and services tax on the supply of goods, services or both
which take place within a State. In the Statement of
Objects and Reasons of Bill, it has been said that the

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GST regime would reduce the cost of production and
inflation in the economy, thereby making the Indian trade
industry more competitive, domestically as well as
internationally. Seamless transfer of input tax credit from
one station to another in the chain of value addition
would incentivise tax combines by taxpayers. GST would
broaden the tax base, resulting in better tax combined
with the help of Robots Information Technology
Infrastructure. In essence of GST has been contemplated
as tax on value addition. Cascading tax effects are sought
to be avoided by a continuous chain of set-offs from
original suppliers to retailers.
9. ‘One India, One market and One tax’ is the
mantra of the GST regime. The structure of GST is of a
destination-based consumption tax with input tax credit of
the tax paid on goods or services at each stage available
in the next stage of value addition for avoiding cascading
effects irrespective of the destination, be it an inter-state
supply or intra-state supply.
10. The flow of ITC along with the supply chain of
registered persons by removing the cascading effect on
one hand and the tax collection by the self-assessment
method in every tax period, on the other hand, is to

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happen simultaneously in every financial year. Section 12
provides the taxing event. Section 12(1) specifies that
the liability to pay tax on goods shall arise at the time
of supply either be the date of issue of invoice by the
supplier
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or the last date, which is required under Section 31 to
issue the invoice with respect to the supply on the date on
which the supplier receives the payment with respect to
the supply. Section 13 provides that the liability to pay
tax on services shall arise at the time of supply which
may be the date of issue of invoice by the supplier or, if
the invoice is issued within the period prescribed under
Section 31 or the date of receipt of payment whichever is
earlier, or the date of provision of service if the invoice is
not issued within the time period prescribed under
Section 31 or the date of receipt of payment or the date
on which the recipient shows the receipt of services in
his books of account. Section 15 provides that the value
of the supply of goods or services or both shall be the
transaction value, which is the price actually paid or
payable for the said supply of goods or services or both,
provided the recipients and the supplier are not related,
and the price is the sole consideration for the supply.
Statutory Prescription:
11. As is evident from the Statement of Objects
and Reasons of the GST Bill, pre-GST tax regimes on the
supply chain of goods and services had the biggest
drawback of the cascading effect of taxes as the right to

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set-off was not available under pre- GST tax regimes
prevailing in the Central and the States. Input

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Tax Credit appears to be an essential part of the GST
regime. The GST Act provides for Input Tax Credit in four
stages.
1) Entitlement to input tax credit under

Section 16 of the Act subject to the
conditions/restrictions prescribed.
2) Claiming input tax credit and provisional

credit in the electronic credit ledger under
Sections 41(1), 43A and 49(2).
3) Utilisation and making payment of the

input tax credit under Section 41(2) and
Section 49(4).
4) Refund of the balance if any under Section 54.
Section 16 which provides for eligibility and

conditions for taking input tax credit reads as under-:
Section 16. Eligibility and conditions for taking input tax credit.-
(1) Every registered person shall, subject to such

conditions and restrictions as may be prescribed
and in the manner specified in section 49, be
entitled to take credit of input tax charged on any
supply of goods or services or both to him which
are used or intended to be used in the course or
furtherance of his business and the said amount
shall be credited to the electronic credit ledger of
such person.
(2)Notwithstanding anything contained in this

section, no registered person shall be entitled to
the credit of any input tax in respect of any
supply of goods or services or both to him unless,-
(a) he is in possession of a tax invoice or debit

note issued by a supplier registered under this
Act, or such other tax paying documents as may
be prescribed
1[(aa) the details of the invoice or debit note
referred to in clause (a) has been furnished by the
supplier in the statement of outward supplies and
such details have been communicated to the
recipient of such invoice or debit note in the
manner specified under section 37;]
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(b) he has received the goods or services or both.
2[Explanation.- For the purposes of this clause, it

shall be deemed that the registered person has
received the goods or, as the case may be,
services-
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(i) where the goods are delivered by the supplier

to a recipient or any other person on the direction
of such registered person, whether acting as an
agent or otherwise, before or during movement of
goods, either by way of transfer of documents of
title to goods or otherwise;
(ii) where the services are provided by the supplier

to any person on the direction of and on account of
such registered person;]
3[(ba) the details of input tax credit in respect of

the said supply communicated to such registered
person under section 38 has not been restricted;]
(c) subject to the provisions of 4[ section 415[***]],

the tax charged in respect of such supply has been
actually paid to the Government, either in cash or
through utilisation of input tax credit admissible in
respect of the said supply; and
(d) he has furnished the return under section 39:

Provided that where the goods against an invoice
are received in lots or instalments, the registered
person shall be entitled to take credit upon receipt
of the last lot or instalment:
Provided further that where a recipient fails to pay

to the supplier of goods or services or both, other
than the supplies on which tax is payable on
reverse charge basis, the amount towards the
value of supply along with tax payable thereon
within a period of one hundred and eighty days
from the date of issue of invoice by the supplier, an
amount equal to the input tax credit availed by the
recipient shall be[paid by him along with interest
payable under section 50], in such manner as may
be prescribed:
Providedalso that the recipient shall be entitled to
avail of the credit of input tax on payment made by
him 10[to the supplier] of the amount towards the
value of supply of goods or services or both along
with tax payable thereon.
(3) Where the registered person has claimed

depreciation on the tax component of the cost of
capital goods and plant and machinery under the
provisions of the Income tax Act, 1961 (43 of
1961), the input tax credit on the said tax
component shall not be allowed.
(4) A registered person shall not be entitled to take

input tax credit in respect of any invoice or debit
note for supply of goods or services or both after
the6[thirtieth day of November] following the end
of financial year to which such invoice or7[****]
debit note pertains or furnishing of the relevant
annual return, whichever is earlier.
8[Provided that the registered person shall be

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entitled to take input tax credit after the due date
of furnishing of the return under section 39 for the
month of September, 2018 till the due date of
furnishing of the return under the said
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section for the month of March, 2019 in respect of

any invoice or invoice relating to such debit note
for supply of goods or services or both made
during the financial year 2017-18, the details of
which have been uploaded by the supplier under
sub-section (1) of section till the due date for
furnishing the details under sub-section (1) of said
section for the month of March 2019.]”
12. Each registered person is allotted three ledgers:
(1) an electronic cash ledger, (2) an electronic credit
ledger, and (3) an electronic liability ledger. The
electronic cash ledger shows the cash available for
settling the tax and related liabilities; the electronic
credit ledger shows the input tax credit available to the
registered person, and the electronic liability ledger
shows the registered person’s tax and any other liability.
Admissible input tax is credited to the taxable person’s
electronic credit ledger. This amount represents the
actual tax paid by the taxable person to his supplier,
which in turn is paid to the Government, and subsection 4
of Section 49 enables the taxable person to pay his output
tax utilising the balance available in the electronic cash
ledger. In effect the tax already paid by the taxable
person is allowed to be set off against the output tax
liability.
13. The input tax credit is not an absolute right but is
an entitlement subject to conditions and restrictions

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under the provisions of the Act and is to be availed in a
specified manner.
14. Section 16(2) prescribes four conditions to avail
the input tax credit

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a) Possessionof tax invoice, debit note or
other prescribed tax payment document.
b) Receipt of goods or services or both
c) Actual payment of taxes for supply
d) Furnishing of the return
These four conditions are cumulative and not
alternative. Clause (b) of Sub-section 2 mandates the
receipt of goods or services for claiming the input tax
credit. Clause (c) of Section 2 mandates the payment of
tax to the Government by cash or by utilizing the input
tax credit. The input tax so utilized must be admissible in
respect of the supply. The utilization of input tax credit is
under Section 41 or Section 43A as may be applicable.
15. Filing of returns is prescribed under Chapter IX
of the CGST Act. Section 37 of the CGST Act provides for
filing of the return in the prescribed form by the seller
effecting outward supply. Section 37(1) of the CGST
Act mandates furnishing electronically the details of
outward supplies of goods or services or both effected
during the tax period on or before the 10 th day of the
month succeeding the said tax period. Such details are to
be communicated to the recipient of the said supplies
within such time and in such manner as may be

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prescribed. Rule 59 of the GST prescribes FORM GSTR-
1. The details of the inward supplies are to be furnished
by the recipient of the supply in FORM GSTR-

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2. On the basis of the details already furnished, a dealer
is required to furnish monthly returns in FORM GSTR-3
and GSTR- 3B. A dealer is eligible for the input tax credit
under Section 16 of the Act in respect of purchases
effected from registered dealers, who have already
collected tax from the seller dealer. The details of such
inward supplies are to be uploaded by the dealer in
FORM GSTR-2. The supplier is bound to upload the
details of sales effected by him to the purchaser dealer
in FORM GSTR-1. The purchaser dealer would file the
monthly returns in FORM GSTR-3 by taking credit of the
input tax credit available pursuant to FORM GSTR-2 filed
by him. Only the net liability after deducting the input
tax credit is required to be satisfied by the purchaser.
Section 16(2)(c) restricts the claim of input tax by a
purchasing dealer to the extent of the tax charge against
the supply of goods has been paid to the Government by
the supplier of goods. If the supplier dealer does not
remit the tax collected from the purchasing dealer, the
latter is denied the benefit of the input tax credit.
16. Rule 36 of the GST prescribes the
documentary requirements and conditions for claiming
the input tax credit. Rule 36 of the GST Act reads as

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under:
“(1) The input tax credit shall be availed by a

registered person, including the Input Service
Distributor, on the basis of any of the following
documents, namely,-
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(a) an invoice issued by the supplier of goods or

services or both in accordance with the provisions of
section 31;
(b) an invoice issued in accordance with the provisions
of clause (f) of sub-section (3) of section 31, subject to the
payment of tax;
(c) a debit note issued by a supplier in accordance
with the provisions of section 34;
(d) a bill of entry or any similar document prescribed
under the Customs Act, 1962 or rules made
thereunder for the assessment of integrated tax on
imports;
(e) an Input Service Distributor invoice or Input
Service Distributor credit note or any document issued
by an Input Service Distributor in accordance with the
provisions of sub- rule (1)of rule 54.
(2) Input tax credit shall be availed by a registered
person only if all the applicable particulars as
specified in the provisions of Chapter VI are contained
in the said document,
2[Provided that if the said document does not contain
all the specified particulars but contains the details of
the amount of tax charged, description of goods or
services, total value of supply of goods or services or
both, GSTIN of the supplier and recipient and place of
supply in case of inter-State supply, input tax credit
may be availed by such registered person.]
(3) No input tax credit shall be availed by a
registered person in respect of any tax that has been
paid in pursuance of any order where any demand
has been confirmed on account of any fraud, willful
misstatement or suppression of facts.
3[(4)No input tax credit shall be availed by a
registered person in respect of invoices or debit notes
the details of which are required to be furnished under
sub- section (1) of section 37 unless,-
*the details of such invoices or debit notes have been
furnished by the supplier in the statement of outward
supplies in FORM GSTR-1or using the invoice furnishing
facility; and
*the details of 4[input tax credit in respect of] such
invoices or debit notes have been communicated to the
registered person in FORM GSTR-2B under sub-rule (7)
of rule 60.”
17. Thus, if a purchasing dealer has documents in
its possession as mentioned in Rule 36, he may avail the
input tax credit in respect of invoices/debit notes, the
details of which are to be furnished under Section 37(1)
provided that the tax of such invoices and debit notes has
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been furnished by the supplier in the statement of output
supplies in FORM GSTR-1 or using revise furnishing
facility; and the details of input tax credit in respect of

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such invoices and debit notes has been
communicated to the registered persons in
FORM GSTR -2B. Submissions on behalf of
the petitioners:
18. The petitioners have submitted that the
petitioners who were registered dealers under the
provisions of the CGST Act and KSGST Act, 2017 are
being denied the claim of input tax credit despite they are
in possession of valid tax invoice, proof of payment of
value of goods along with GST components to the
respective suppliers and receipt of the goods. It is
submitted that in some cases respective supplier had
remitted the tax (GST) but not reflected in their return
GSTR due to some technical reasons. Another category of
petitioners is those who have received the goods or
services and have valid tax invoices, proof of payment of
the value of goods along with the GST component to the
respective suppliers, but the respective suppliers had
not remitted the GST on the supply made by them to the
petitioners. The third category of petitioners are those
who are in possession of an invoice but have no clear
proof of payment of consideration or tax towards the
inward supply and might not have received goods in

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their possession. The first out of the three categories of
the petitioners, who are recipients of the goods supplied
to them by the supplier dealers, their case is covered
in Circular No.183/15/2022-GST
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dated 27.12.2022 issued by the Central Board of
Indirect Taxes and Customs.
19. It is submitted on behalf of the petitioners that
the GSTR-2A is an auto-populated, dynamic, read-only
document containing details of inward supplies based on
details of outward supplies filed by the purchasing dealer.
FORM GSTR-2A is only a facilitator for making a
confirmed decision while doing self- assessment. Non-
performance or non-operability of FORM GSTR- 2A or, for
that matter, the other forms should be of no avail
because a registered person is obliged to submit a return
on the basis of such self-assessment in the Form
prescribed manually on an electronic platform. Non-
availability of the payment of tax in GSTR-2A cannot
impact the entitlement of the taxpayers to avail the input
tax credit on the self-assessment basis in consonance
with the provisions of Section 16 of the GST Act. It is
further submitted that the CBIC in its press release dated
18.10.2018, has clarified that furnishing of output details
in FORM GSTR-1 by the corresponding supplier(s) and
the facility to view the same in FORM GSTR-2A by the
recipients is in the nature of taxpayer facilitation and
does not impact the entitlement of taxpayer to avail ITC

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on self-assessment basis in consonance with the
provisions of Section 16 of the Act. It is therefore,
submitted that the claim for input tax credit, for which
the recipient is otherwise

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eligible, should not be denied merely on the difference
between GSTR-2A and GSTR-3B.
20. It is also submitted that Section 155 of the GST
Act causes a burden upon the recipient of goods or
services to prove the genuineness of the ITC claimed by
him. Section 155 of the GST Act prescribes that “Where
any person claims that he is eligible for an input tax
credit under this Act, the burden of proving such claim
shall lie on such person.”
21. The submission is that if the recipient dealer has
in his possession, documents as mentioned in Rule 36 i.e.,
valid tax invoice, proof of payment of value of goods along
with GST component to the respective supplier and the
actual receipt of goods, it should be considered that he
has discharged the burden under Section 155 regarding
the genuineness of the ITC claim by him. The recipient
dealer cannot be burdened to ensure that the supplier of
goods and services has paid the tax and such a condition
would be absolutely impossible for the recipient dealer
to comply with.
22. The maxim lex non cogit ad impossibilia means that
law does not compel a man to do anything in vain or
impossible or do something which he cannot possibly

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perform. It is within the power of the State to collect
and recover taxes, and this duty

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cannot be passed on to the recipient dealer, if the
supplier dealer does not pay the tax though collected
from the recipient dealer.
23. It is further submitted that there could be two
possible situations which may arise in the case of claim of
ITC by the purchaser dealer:
(i) Though the recipient dealer has in his possession all
the documentary evidence as provided under Rule 36 to
prove the eligibility of the claim of ITC, but supplier
dealer has omitted to pay the output tax, and the
Government fails to recover the tax from the supplier
dealer, in such a situation, though the recipient dealer
has paid the tax on inward supplies received from the
supplier dealer but the recipient dealer would not be
entitled to claim the input tax credit. The recipient dealer
has no means to force the supplier to make the payment
and therefore, the doctrine of impossibility would be
applicable in such a situation; and (ii) where the revenue
is able to recover the tax from the supplier dealer along
with the interest applicable and penalty under Sections
73 or 74 of the GST Act, however, the recipient dealer
would be denied the claim of input tax credit as the said
tax would not get reflected in GSTR-2A. This situation

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would lead to unjust enrichment of the Government as on
the same taxable transaction, the Government would
collect tax from the recipient dealer and also from the
supplier along with interest and penalty, as there is

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no provision for refunding the amount collected from the
recipient in cases where the department successfully
recovers the unpaid tax from the supplier who had
defaulted. It is therefore, submitted that Section 16(2)(c)
is in violation of Article 19(1)(g) of the Constitution of
India. It is further submitted that this provision either
be declared unconstitutional or read down and should
be held that GSTR 2A is an auto-populated dynamic
document based on GSTR 1 filed by the supplier dealer.
GSTR-2A is a read-only document and the recipient
dealer does not have any means to edit or modify the
data in it, therefore, any missing invoice details in
GSTR-2A due to the supplier dealer failing to furnish the
correct details or otherwise should not be a basis for
denying the input tax credit to a recipient dealer if his
claim is genuine and bona fide and he has relevant
documents in his possession to prove his claim as the
recipient dealer has no means to compel the suppliers to
file their returns on the statutory form.
24. It is submitted on behalf of the petitioners that
by invoking the provisions of Section 16(2)(c) of the GST
Act, to deny input tax credit to the bona fide purchaser
dealers, the respondents would be treating both the

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purchaser dealers who collude with the supplier dealers
to claim false credit of ITC and innocent and bona fide
purchaser dealers who have paid the tax to the supplier
dealers equally. Section 16(2)(c) confers unchecked

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powers on the respondent authorities to treat bona fide
and genuine purchaser dealers and guilty purchasers
alike. This equal treatment of bona fide or innocent
purchasers and guilty purchasers is violative of Article
14 of the Constitution of India. It is further submitted
that denial of ITC to a bona fide purchaser dealer who is
the recipient of the goods because of the default of the
supplier dealer in not making the payment of GST, though
the supplier dealer has collected it from the recipient of
the goods would tantamount shifting the incidence of tax
from supplier to the recipient. Denying of ITC to the bona
fide purchaser dealer for default of supplier dealer over
whom the purchaser dealer has no control, is an arbitrary
and irrational exercise of powers, and such a provision is
an infarction of the equality clause enshrined under
Article 14 of the Constitution of India.
25. It is further submitted that the claim of ITC is a
right of the recipient dealer and not a concession given
by the taxing authorities under the statute. The input tax
credit under the GST Act is the property of the recipient
dealer, and denying the credit for default of the supplier
dealer would be violative of Article 300 A of the
Constitution of India, which provides that no person shall

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be deprived of his property, save by the authority of law.
26. The GST regime has been brought in to provide
a uniform tax on the supply of goods and services across
the country
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and to avoid cascading effects on such supply. The ITC is
the very basis of the GST regime. The tax structure under
the GST is heavily dependent on ITC being available to
the recipient dealer. The recipient dealer would depend
heavily on the credit available to him under the Act for
discharging his outward tax liability. If the eligible tax
credit is blocked or denied or it is made to reverse credit
already taken, it affects the business operation of the
recipient dealer. It is the submission of the Counsel for
the petitioners that Section 16(2)(c) is a violation of
Article 19(1)(g) of the Constitution of India, inasmuch as
the denial of eligible input tax credit affects the business
operation of the recipient dealer. It is submitted that
Section 16(2) (c) of the GST imposes an unreasonable and
onerous condition and gives unequal treatment to the
bona fide recipient of the goods and services. The section
does not provide any measure for compliance by the
supplier dealer for making payment collected from the
recipient dealer, and therefore, the said provision falls
foul of Articles 14 and 19 of the Constitution of India.
27. It has also been submitted on behalf of the
petitioners that furnishing of outward details in GSTR-1
by the corresponding supplier dealers and the facility to

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view the same in GSTR-2A by the recipient dealer are in
the nature of facilitation and should not have an impact
upon the ability of the recipient dealer to avail ITC

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on self-assessment basis as is the general mandate of
Section 16 of the Act. In the alternative, it is submitted
that the provision of Section 16(2)(c) may be read down
and if the recipient dealer sufficiently establishes that he
has paid the tax to the supplier and the default is on the
part of the supplier dealer, the ITC should not be denied
to the recipient dealer and the action should be taken
against the supplier dealer who has defaulted in posting
the tax collected from the recipient dealer. In the absence
of any finding about the recipient dealer's mala fide
intention, connivance or wrongful association with the
supplier, the eligible ITC should not be denied to the
recipient dealer on account of the fraudulent conduct of
the supplier dealer. If the recipient dealer is in possession
of the requisite documents to substantiate the claim of
eligibility for ITC, it should be considered that the
recipient dealer has discharged the burden of proof under
Section 155 of the GST Act.
28. Section 16(2)(c) requires the payment of taxes
to the Government to be eligible for availing the credit
of input tax, subject to the provisions under Section 41.
Section 41(1) provides that every registered person
shall be entitled to avail the credit of eligible input tax,

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‘as self-assessed’, in his return. Section 41(2) provides
that when the supplier fails to pay the tax payable, the
input tax availed by the registered persons shall be
reversed along
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with interest. Proviso to Section 41 provides that once the
supplier makes the payment of tax, payable to the
Government, the registered person can re-avail the same.
29. The only requirement to avail ITC is the
payment of tax by the supplier. The language used by the
legislation if closely examined, the underlying intention
of the legislature is that the ITC under the GST Act is in
the nature of right, inasmuch as Section 16(1) which is
the enabling provision guarantees the registered persons
to take credit for input tax paid by him on the supply of
goods or services or both received by him. The language
of Section 16(1) makes it clear that the input tax credit
is a matter of right. This entitlement to ITC follows from
complying with the conditions and is subject to the
restrictions contained in Section
49 of the Act. Section 49 makes it clear that the ITC, ‘as
self- assessed in the return,’ shall be credited to the
electronic credit ledger of the registered person in
accordance with Section 41. From reading the
provisions of Sections 16(1), 41 and 49, it would be clear
that the ITC is nothing but the right of the recipient
dealer. Under Section 16(1) registered person ‘shall be
entitled’ to take credit of ITC. This phrase would show the

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mandatory effect of the provision. Entitlement means
rights of certain benefits and privileges. The submission
is that the ITC is a matter of right and not a concession.
Denial of ITC on a mismatch with the figure

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mentioned in the auto-populated documents in FORM
GSTR-2A is unjustified. Authorities must conduct an
enquiry and should verify the documents in possession of
the purchaser or the recipient dealer to ascertain the bona
fide of such a dealer in claiming the ITC on supplies
received from the supplier dealer. Section 16(2) begins
with a non-obstinate clause and prescribes certain
restrictions and conditions for availing ITC by the
recipient dealer. If the supplier dealer after collecting the
tax from the recipient dealer has not paid the same to the
Government, the recipient dealer cannot be held liable for
such conduct of this supplier dealer, and if the recipient
dealer in his self-assessed returns has claimed the ITC
for which such dealer has documentary evidence to
support the same, denial of the rightful claim of ITC
would run against the very scheme of the GST regime as
provided under the GST Act. It is further submitted that
the Central Board of Indirect Tax and Customs realised
this difficulty and issued Circular No. F&C 49/21/2016-
GST and Circular No.59/33/2018-GST dated
04.09.2018 giving clarification to refund related issues.
The circular states that the refund claim shall be
accompanied by a printout of FORM GSTR-2A of the

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claimant for the relevant period for which the refund is
claimed. It is further stated that the proper officer shall
treat FORM GSTR-2A as evidence itself. However, while
FORM GSTR-2A does not contain the details of all
invoices
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related to the ITC availed, the proper officer should call
for such invoices if he deems it necessary for the
examination of the claim for refund; the same is the case
where the ITC is sought to be set off against the other
levies.
30. On behalf of the petitioners, it is submitted that
Section 16(4) is a procedural provision, and by recourse
to the procedural provision, the substantive right of the
taxpayer, i.e., the claim of ITC on the inward supply,
cannot be defeated. Input Tax Credit is the core concept
of the GST regime as it avoids the cascading effect of
taxes and ensures that tax is collected in the State where
goods, services, or both are consumed.
31. Filing of returns with late fees and interest
cures the defect of late filing. Once a return has been
filed with a late fee, by applying the provisions of
Section 16(4) of limitation, the substantial claim of the
dealer should not be defeated regarding ITC, which is
otherwise admissible to him under the provisions of the
Act. Once the returns are accepted with the late fee, the
dealer should be eligible for the ITC. Once the delay is
regularised, such returns are to be construed to be filed
within the due date. Section 47 of the Act provides for

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the filing of returns with late fees, and if a dealer files
the return beyond the due date with late fees, such
returns should be accepted without applying the
rigour of limitation prescribed under Section 16(4) of the
Act.
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32. It is submitted that the provisions of Section
16(4) of the Act are arbitrary in nature and hence
violative of Articles 14 and 19(1)(g) of the Constitution of
India. The assessee cannot be made to suffer by
disallowing ITC on account of the failure on the part of
the Department to notify the FORM GSTR-2 and GSTR-3
respectively. It is also submitted that the retrospective
amendment to Rule 61 of the CGST Rules, 2017 is also
unconstitutional, being violative of Article 14 of the
Constitution. Similarly, retrospective amendment to Rule
61(5) of the Rules is also unconstitutional, being violative
of Article 279A of the Constitution of India.
33. Delay in making the entries within the time fixed
should not be the basis for denying the benefits of ITC. It
is further submitted that ITC is a facility of credit, and it
is in the nature of vested rights. The credit earned under
the GST Act is the property of the taxable person, and
therefore, the denial of ITC would be in violation of
Article 300A of the Constitution of India. This substantial
benefit cannot be denied due to the procedural lapse of
mere non-disclosure in GSTR-3B within the due date.
Since, the details of ITC are already available in GSTR-2A,
which is available with the Department prior to the due

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date prescribed under Section 16(4), and the availment
of ITC would be a mere disclosure in GSTR-3B,
therefore, the substantial benefit cannot be denied due to
procedural lapse of mere non-disclosure in GSTR-3B

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within the due date. Denying of ITC to a dealer and
levying tax, interest and penalty for not filing the return
within the stipulated time under Section 16(4) of the Act
would lead to significant financial setbacks for the
registered suppliers/recipients of goods and services. This
also results in double taxation in the form of collecting
tax from the purchaser and supplier on the same goods
or services due to procedural error. The legislative intent
behind inserting Section 16(4) can never be to take away
the ITC which is made eligible by following the broad
scheme of the law. It will never be the intent of the
legislature to take away the claim or the benefit from one
hand and give it to another. The purpose of Section 16(4)
is to ensure that the ITC should be taken in a timely
manner within the specified time limit in the Books of
Accounts of the registered tax person. Section 16(4) of
the Act does not permit to avail ITC relating to the
preceding financial year in case of delayed filing of the
subsequent year’s September month GSTR- 3B.
Considering the intricacies, and complexity associated
with return filing during the initial years of GST,
Technical glitches, frequent amendments, the careful
process followed in ascertaining eligible ITC, knowledge

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level of the taxpayer in understanding the flow of credit
through a dynamic return GSTR 2A and other related
factors should be considered, and therefore, if the returns
have been filed beyond the time prescribed with late
fees, the
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dealers should not be denied of his claim for ITC as
reflected in GSTR 2A.
34. Sri. Dr K.P. Pradeep has submitted that Section
16(4) providing a time limit to claim the ITC by
purchasing dealer/recipient dealer is arbitrary and
unreasonable. It is settled law that even the provision of a
taxing statute or even the taxing statute in its entirety can
be tested for its constitutionality in the exercise of the
power of judicial review by a Constitutional court. If
there is a manifest arbitrariness in the provision itself or
the provision is unjust or discriminatory in nature, the
said provision can be struck down as being violative of
the Constitution. If a taxing statute violates the principle
of equality or is discriminately unreasonable and
arbitrary, it would be violative of Articles 14 and 19(1)(g)
of the Constitution of India. The condition that unless the
return in Form 3B is filed within the stipulated time, the
recipient dealer would not be entitled to ITC is arbitrary,
unjust, and liable to be struck down.
35. It is also submitted that the supplier dealer acts
as an agent of the Government to collect tax from the
recipient dealer. The recipient dealer would pay the tax to
the supplier dealer while receiving the supply of goods or

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services from him, and the supplier dealer collects tax on
behalf of the Government to be deposited by him with the
Government. It is submitted that though

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the tax has been collected by the Government through the
supplier dealer, the ITC would be disallowed to the
recipient dealer on the ground that he could not file the
return in GSTR-3B on time and did not claim the ITC
within the time specified under Section 16(4). It is also
submitted that it amounts to double taxation; the
recipient dealer would have already paid the tax on the
supply received to the Government through the supplier
dealer, but if he, for any reason, has not filed the return
on GSTR-3B claiming ITC on time, he would have to pay
entire tax with interest and penalty. It is, therefore,
submitted that such a condition of claiming ITC by filing
GSTR-3B on time is unreasonable and arbitrary against
the spirit of the GST regime.
36. It is further submitted that the objective of
implementation of the GST regime by introducing Article
246A and enacting the GST Acts is not simply to generate
revenue and collect tax by providing modes of levy and
collection. The main objective is to avoid cascading
effects on the supply chain of goods and services and ease
the taxing administration. The provision of Section 16(4)
runs contrary to the said objective of the legislation and,
in effect, is punitive. Section 16(4) is in contradiction with

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the policy framework under the Constitution, particularly
Articles 246A, 286, 366(12A) and (26A).

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37. Dr. Pradeep Kumar, learned counsel for the
petitioner, also submits that Section 39 provides for the
furnishing of returns within the prescribed time.
However, under Section 39(6), the Commissioner may, by
notification, extend the time limit for furnishing the
returns for a particular class of registered persons as
may be specified, for reasons to be recorded in writing.
38. Section 16(4), however, provides for a
statutory stipulation of a time limit for filing the return in
GSTR -3B in claiming the ITC. Section 44 of the Act
provides for filing the annual return for every financial
year on or before the 31 st day of December following the
end of such financial year. However, the time limit
prescribed under Section 16(4) is 30th November, and it is
not subject to any change. It also provides a rider that the
claim should be made before 30th November or before the
date of furnishing the relevant annual return, whichever
is earlier. By reading the provision of Sections 39,41,44
and 50, which permit relaxation in furnishing returns,
permits filing returns with late fees and payment of tax
with interest on the late period. The provision under
Section 16(4) mandating submission of a claim for ITC
within a particular time should be read as a directory and

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not mandatory.
39. In the alternative, Dr Pradeep Kumar submits
that by Sections 100 of the Finance Act, 2022, Act 6 of
2022, the due date

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for furnishing of return under Section 39 in the month of
September has been substituted with 30th day of
November in Section 16(4). It is submitted that the said
substitution should apply retrospectively from 01.07.2017
to 30.11.2022, as it is only a procedural aspect. The
amendment has been introduced to ease the difficulties
pointed out. In several cases which are pending before
the Court, the claim was made before 30 th November, but
in the relevant period, it was 20th October, which was
the due date for furnishing the return under Section 39
for the month of September. It is submitted that if the
retroactivity is given to the amended provision, the
registered person can overcome the present difficulties.
Learned counsel for the petitioners also submitted that
this court may read down Section 16(4) to give effect to
the amended provision of providing the 30th day of
November for the due date for furnishing the return
under Section
39 for the month of September with effect from
01.07.2017, considering the peculiar nature of difficulties
in initial period of implementation of the GST regime.
40. The liability to tax arises at the time of supply.
Although, the due date for filing the return can vary
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according to the notified dates. Return means to disclose
the liability as per the books of account. The actual
availment of credit happens in the books of account, and
it is merely disclosed through return. It is,

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therefore, submitted that the availment of ITC is not
dependent on the filing of GSTR-3B. If an assessee can
prove with evidence that the credit was availed in the
books of account within the time limit prescribed in
Section 16(4), claim the ITC would be in compliance with
Section 16(4). The filing of return in GSTR-3B is,
therefore, only a condition precedent for allowing the
claim of ITC, which has been claimed in the books of
account.
Submissions of the Respondents: -
41. On behalf of the respondents, it is submitted
that under the GST laws, the tax collected has to be
assigned to the jurisdiction where consumption takes
place. The ITC, therefore, crosses a State during inter-
state supplies. The GST Act prescribes the conditions,
restrictions, time limit and the manner for availing ITC.
These conditions, restrictions etc along with other
provisions form the legal fulcrum that balances three
requirements:
a) granting of ITC for removing cascading effect.
b) Achieving collection of Tax by self-assessment
method for each financial year; and
c) ITC transfer compliance to the destination state on

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inter- state- supplies- (through the IGST mechanism
where the Centre collects tax equivalent to (CGST
and SGST).
42. An inter-state supplier in the originating /
exporting State uses his CGST / SGST credits for
payment of IGST collected

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from the recipient. The recipient based in the
destination State will discharge his output tax liability
(CGST+SGST) by claiming credit for the IGST he paid to
the inter-state supplier in the originating State. The
Centre and originating State have an obligation to
transfer the CGST and SGST component utilized by the
inter-state supplier to the IGST Account to make it
available for the destination State. This obligation of the
Central and State Governments is prescribed under
Section 53 of the CGST Act which would read as under:
“Transfer of Input Tax Credit:-On

utilisation of input tax credit availed
under this Act for payment of tax dues
under the Integrated Goods and Services
Tax Act in accordance with the provisions
of sub-section (5) of section 49, as
reflected in the valid return furnished
under sub-section (1) of section 39, the
amount collected as central tax shall
stand reduced by an amount equal to
such credit so utilised and the Central
Government shall transfer an amount
equal to the amount so reduced from the
central tax account to the integrated tax
account in such manner and within such
time as may be prescribed.”
43. In the absence of Section 16(2)(c) in a case
where the inter-state supplier defaults in making payment
of tax (SGST+CGST collected) and the interstate supplier
is allowed to take credit based on his invoice, the
originating State Government will have to transfer
amounts it never received in the tax periods in a

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financial year to the destination States. This would cause
loss to the State inasmuch as the originating State
would be required
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to transfer the amount without having received it, and
this scenario, in the absence of Section 16(2)(c), would
completely upset the entire tax scheme under the GST
laws.
44. It is further submitted that granting tax credit is
an integral part of the computation and collection of
tax. Tax collection is an important element of budget
allocation and estimation of the Union and State
Governments. Section 16 of the Act and Rules made
thereunder provide conditions, restrictions, time-limit and
manner for availing ITC, which is a self-monitoring and
self-policing provision. This is for the registered person to
request the supplier dealer for documentation and tax
payment compliance in order to claim ITC. If the supplier
dealer fails to deposit the tax collected from the recipient
dealer, it would break the tax chain and the ITC in such a
situation cannot be allowed as the State could not have
received the tax, and therefore, there would be no
question of making payment of the tax where the State
has not received the tax.
45. Learned counsel appearing for the CBIC has
submitted that a new provision of Section 16(2) (aa) has
been introduced with effect from 01.01.2022 providing

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for communication for matching of recipient’s invoice
with the supplier’s and outward supply via GSTR 2A/2B.
Section 38 stands substituted with effect from 01.10.2022
with provision for auto-generated statement

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GSTR-2B, indicating the eligible and ineligible credit in
respect of inward supply. Section 41 is also substituted
providing for reversal and re-availing of credit. Prior to
these amendments, Section 41 provided that the supplier
could take only eligible ITC as self- assessed credit in his
return, and that amount would be credited on a
provisional basis to the electronic credit ledger, which
can be utilized for payment of self-assessed output tax.
The manner of crediting is provided under Section 49(2)
of the Act.
46. Prior to the 01.01.2022 amendment, the eligible
credit had to be determined by the taxpayer based on
the supplier’s GSTR 1 reflected in GSTR-2A and by
verifying his books of account and the supplier’s GSTR-3B
return filed online. To complete this process and avail
credit in respect of inward supplies for a financial year,
a recipient had a maximum of 18 months to a minimum of 6
months’ time under Section 16(4) of the Act as it stood
prior to 01.01.2022. For getting the invoice/debit note
uploaded by the supplier and tax paid, a maximum of 20
months to a minimum of 8 months after that is available
with effect from 01.01.2022. The time limit for availing ITC
in GST laws cannot be said to be a restriction. The

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estimation of budgetary allocation has to be taken by the
Central and State Governments every year, and they are
required to pass a budget. There cannot be any
uncertainty regarding tax collection, budgetary allocation
and
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estimation of the Central and State Governments.
Therefore, the time frame makes it a reasonable
mechanism and cannot be said to be in violation of any of
the rights of the petitioner as submitted by them. It is
further submitted that the time limit for availing the ITC
in the GST laws is not a new provision. Different VAT
legislations and CENVAT Credit Rules provided time
limits to claim eligible ITC.
47. To overcome the initial difficulties at the initial
stage of implementation of the GST regime and the large-
scale mismatch of outward supply reflected in recipients,
GSTR-2A with ITC availed in GSTR-3B returns, the CBIC
has issued Circular Nos.183/15/2022 and 193/05/2023,
considering that GSTR 2A was not available during the
inception of GST. The said circulars cover the period
from the inception of the GST regime till the insertion of
Section 16(2)(aa) with effect from 01.01.2022. ITC can be
claimed and availed by the recipient for the bona fide
scenarios listed in those circulars on submitting proof of
actual payment to the Government by his supplier.
48. Section 16(1) of the CGST is the enabling
provision. The said provision is subjected to conditions
and restrictions in the manner provided under Section 49

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of the CGST Act. It is further submitted that the ITC is
not a right of a registered dealer, but it is a concession
extended under the statute, which is evident from

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Section 49(2) of the CGST Act. Section 16(2) places
restrictions on eligibility for ITC, whereas Section 16(4) is
the restriction on time for availing ITC. Section 16(2)
cannot be read to restrict other restricting provisions,
i.e., Sections 16(3) and 16(4).
49. In view of the aforesaid, it is submitted that
neither Section 16(2)(c) nor Section 16(4) are infarction
of Article 14 and 19(1)(g) nor unworkable as contended.
It is, therefore, submitted that the writ petitions are
devoid of merit and substance, which are liable to be
dismissed.
50. Mr Mohammed Rafiq, the learned Special
Government Pleader (Taxes), has submitted that the sales
tax, though, is an indirect tax on the consumers, but the
incidence of tax is on the sale of goods, which falls
squarely on the dealer. It may not be necessary for the
dealer to have passed the incidence of tax on sale to
the purchaser. Therefore, the contention raised in the
writ petition is that by denying the ITC under the
provisions of Section 16(2) (c) and 16(4) of the Act, the
levy loses its character as an indirect tax, has no merit
and is to be reflected.
51. It is further submitted that the ITC enables

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dealers to set off tax paid on purchase. But this is not a
right of the dealer. This is a concession provided under
the provisions of the Act in order to avoid a cascading
effect on the value chain of the goods and services
supplied. It is submitted that it would always be open

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to the rule-making authority to provide for
abridgement or curtailment of a concession. In support of
the said submission, the learned Special Government
Pleader has placed reliance on the judgments in the case
of Godrej & Boyce Mfg. Co.(P) Ltd. & others V. CST & others
[(1992) 3 SCC 624] and Division Bench judgmNent of the
Bombay High Court in Mahalaxmi Cotton Ginning Pressing &
Oil Industries v. State of Maharashtra [2012 SCC OnLine Bom
733]. An entitlement to set off is the creation of the
statute under the terms and conditions provided by the
legislation, which are required to be strictly observed. A
registered person cannot claim an entitlement to set off
as an absolute right. A dealer would not be entitled to
claim set off unless the conditions precedent are met,
which are prescribed in the statute.
52. Exemptions, concessions and exceptions are to
be treated on par and must be strictly construed. ITC is
not a matter of right. To claim the entitlement of ITC, the
burden of proof is on the assessee. The assessee must
establish the claim for the concession or benefit.
Entitlement to ITC is neither a fundamental right nor a
Constitutional right. Such entitlement is always subject to
statutory prescription and can be regulated by the statute

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providing conditions and limitations. In support of the
said submission, the learned Special Government
Pleader has placed

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reliance on the judgment in Union of India & others V. VKC
Footsteps (India) (P) Ltd. [(2022) 2 SCC 603]
53. It is submitted that the heading of Section 16 is
the eligibility and conditions for taking ITC. Section 16(1)
provides for entitlement to take input tax credit. It is
couched as a general provision which entitles a dealer to
take ITC, whereas Section 16(2) provides
conditions/restrictions for such entitlement. Subsection
(2) is couched with a non-obstante clause, by virtue of
which it overrides anything contained in the said Section.
The statutory prescription is clear and unambiguous from
the negative language employed “Notwithstanding
anything contained in the Section, no registered person
shall be entitled to the credit of any input in respect of
any supply of goods or services or both to him unless,..”
54. Clauses (a) to (d) of subsection (2) of Section 16
are limitations and restrictions placed for availing the
concession/entitlement of ITC under Section 16(1). Clause
(c) to Subsection (2) of Section 16 is a mandate and
emphatic that no registered person shall be entitled to
the credit to the ITC in respect of any supply of goods
or services or both to him unless the tax charged in
respect of such supply has been actually paid to the

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Government. Section 155 of the Act casts a burden of
proof in relation to the claim of ITC on the registered
person. Learned
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Government Pleader submits that Section 16 is a code by
itself which provides for entitlement as well as
conditions/ restrictions to claim for ITC which are provided
under Clauses (a) to (d) of Section 16(2). The legislative
intent is very clear from the phrase employed in Section
16(2)(c); “actually paid to the Government” and thus, the
claim/entitlement to ITC under Section 16(1) would be
allowable only to the extent of tax, if it has been
actually paid into the treasury in respect of the
goods/services supplied to the dealer.
55. The learned Special Government Pleader has
placed reliance on the judgment in the case of Astha
Enterprises v. The State of Bihar [CWC No. 10395 of 2023] and
State of Karnataka v. Ecom Gill Coffee Trading (P) Ltd. [2023
SCC OnLine SC 248] to submit that condition for availing
ITC has been specified in Clause (a) to (d) of Section
16(2) are required to be satisfied together and in
isolation for availing the ITC. The burden is always on the
purchaser dealer to prove the claim for ITC. There should
be credit available in the credit ledger of the purchaser
dealer to claim input tax; otherwise, the claim would
get frustrated, and the claim of ITC cannot be sustained
when the supplier dealer has not paid the tax amount to
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the Government despite collection from the purchasing
dealer.
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56. The learned Government Pleader has submitted
that there is no force in the arguments of the counsels for
the petitioners that Section 16(2)(c) is in violation of the
equality clause as enshrined in Article 14 of the
Constitution of India. The concession bestowed under
Section 16(1) is subject to the conditions/restrictions as
provided in the Section. The ITC, being a
concession/entitlement, can always be subjected to
limitations and restrictions as the legislature may think it
proper. The restriction placed under Section 16(2)(c) is to
ensure the payment of tax by the supplier to the
Government and restrictions as to the time for such
availment as contemplated under Section 16(4) are
applicable to all dealers, and therefore, there is no
substance in the submissions of the counsel for the
petitioners that there is a violation of Article 14 of the
Constitution of India. The conditions/restrictions for
availing the ITC or claiming of concession to the ITC
are applicable to all registered taxpayers to claim the
concession of the ITC, and therefore, it cannot be said
that there is a violation of Article 14 of the Constitution of
India. Learned Government Pleader also places reliance
on the judgment of the Division Bench of this Court in

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Nahasshukoor v. Assistant
Commissioner [WA. No.1853 of 2023:2023: KER: 69725
decided on 3rd November 2003] and State of Himachal
Pradesh v. Goel Bus Service [ 2023 SCC OnLine SC 46].

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57. A legislation or provision in the statute can
be challenged only on establishing manifest arbitrariness
or unreasonableness besides legislative incompetence
and in- violation of rights guaranteed under Part-III of the
Constitution of India. There is no manifest arbitrariness
or unreasonableness in providing the conditions for
availing the concession of ITC by a registered person on
supplies of goods or services or both received by him
from another registered dealer. [Sharaya Bano & others v.
Union of India; (2017) 9 SCC 1]
58. Challenge to the Constitutional validity of
Section 16(4) of the CGST Act, 2017 has been
unsuccessful before the Division Bench decisions of the
High Court of Patna and the High Court of Andhra
Pradesh in Gobinda Construction & others v. Union of India &
others [CWC No. 9108 of 2021, decided on 8th September 2023]
and Thirumalakonda plywoods v. Assistant Commissioner of
State tax [2023 SCC OnLine AP 1476]. It is therefore
submitted that the issue of whether Section 16(4) of the
Act is constitutionally valid or not is no longer res integra.
It is further submitted that the legislative wisdom in
prescribing a cutoff date for filing the return in claiming
the ITC cannot be interfered with inasmuch as the said

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prescription is neither capricious nor whimsical. The time
limit prescribed in Section 16(4) is applicable
universally to all registered persons. The

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contention that by prescribing a cut-off date for availing
the benefit, some of the registered persons may be
adversely affected cannot be a ground to challenge the
provision as it cannot be said that such a prescription is
in violation of Article 14 of the Constitution of India.
Discrimination resulting from fortuitous circumstances
arising out of the particular situation in which some of the
taxpayers find themselves is not hit by Article 14, if the
legislation, as such, is of general application and does not
single them out for harsh treatment. Advantages or
disadvantages to individual assessees are incidental and
inevitable and are inherent in every taxing statute. It has
to draw a line somewhere and some cases necessarily fall
on the other side of the line. In support of the said
submission, the learned Special Government Pleader has
placed reliance on Khandige Sham Bhat v. AITO [AIR 1963
SC
591] and the State of Bihar and others v. Bihar Pensioners
Samaj [(2006) 5 SCC 65].
59. Heard Ms. Meera V Menon, Dr K P Pradeep, Mr. K P
Abdul Azeez, Mr. Aji V Dev (Sr), Mr. Tomson T Emmanuel, Mr.
K S Hariharan Nair, Mr. P N Damoodaran, Mr. A Krishnan, Mr.
K N Sreekumaran, Mr. A Kumar (Sr) and Ms. G Mini, learned
Counsel for the petitioners; Mr. Mohammed Rafiq learned

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Special Government Pleader for the State; and Mr. P R
Sreejith, learned Senior Standing Counsel for the CBIC.

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Issues:
60. Having considered the rival submissions of the
learned Counsel representing the petitioners, the Central
Government, the State Government, and the CBIC, the
following issues arise for determination in this batch of writ
petitions:
What are the grounds on which a taxing Statute can be
I)
unconstitution
II) What is the nature of the claim to Input Tax Credit
scheme of the GST Act and the Rules made

III) Whether Section 16(2)(c) and Section 16(4) of the
infringe the Constitutional provisions and are

Discussion:
Issue No. I: What are the grounds on which a taxing Statute can be
held
to be unconstitutional?
61. Firstly, a tax can be valid if it is within the competence of
the legislature imposing it. Secondly, it is for the public
purpose; thirdly, it does not violate fundamental rights. Article
246A has been inserted by way of the Constitution (One
Hundred and First Amendment) Act 2016, which paved the
way for legislation of Central Goods and Services Act and
State Goods and Services Act, which reads as follows:
“246A. Special provision with respect to goods and services

tax.
“(1) Notwithstanding anything contained in articles

246 and 254, Parliament, and, subject to clause (2),
the Legislature of every State, have power to make
laws with respect to goods and services tax imposed
by the Union or by such State.
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(2) Parliament has exclusive power to make laws

with respect to goods and services tax where the
supply of goods, or of services, or both takes place in
the course of inter-State trade or commerce.
Explanation.—The provisions of this article, shall, in
respect of goods and services tax referred to in
clause (5) of article 279A, take effect from the date
recommended by the Goods and Services Tax
Council.”
62. Thus, the Central Legislature and the State
Legislature have been given concurrent power to enact laws to
impose a tax on the supply of goods or services. GST
legislation has been enacted under Article 246A, which
empowers the Central and State legislatures to enact such a
law. In view of the said provision, it cannot be said that the
CGST/SGST Act has been enacted by the Legislature with no
competence. It is also not the contention of the petitioners
that the tax on the supply of goods and services is not for
public purposes.
63. The taxing statute can be declared unconstitutional
if it infringes the fundamental rights guaranteed under Part III
of the Constitution of India including Article 14. However, in
view of the inherent complexity of fiscal adjustment of diverse
elements, a larger discretion has to be permitted to the
Legislature for classification so long as there is no
transgression of the fundamental principles underlying the
doctrine of classification. The Legislature must enjoy a wide
and flexible power to enable the Legislature to adjust its
system of taxation in all proper and reasonable ways. The

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Legislature has much wider elbow room in picking and
choosing places, objects, persons, methods and even rates of
taxation so long as it is done reasonably. A taxing statute
cannot be said to be invalid on the grounds of

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discrimination merely because other objects could have been
taxed but are not taxed by the legislature. Similarly, the mere
fact that the tax is more on some goods/persons or categories
is no grounds to hold the provisions invalid.
64. A Constitutional Bench of the Supreme Court in
Vivian Joseph Ferreira v. Municipal Corporation of Greater Bombay
[AIR 1972 SC 845] has culled down the principles emanating
from several previous decisions to hold a tax to be a valid tax.
Paragraphs 14 to 16 of the said decision, which are relevant,
are extracted hereunder:
“14. The question of validity of taxing statutes has

arisen before this Court in a number of cases. The
principle emerging from them is that in order that a
tax may be valid, it is firstly within the competence of
the legislature imposing it, secondly that it is for a
public purpose, and thirdly that it does not violate the
fundamental rights guaranteed by Part III of the
Constitution. The taxing statute is as much subject to
Art.14 as any other statute, 1961 (3) SCR 77: (AIR
1961 SC 552), Raja
Jagannath v. U. P. 1963 (1) SCR 220: (AIR 1962 SC 1563)
East
India Tobacco Co. v. Andhra Pradesh 1963 (1) SCR
404: (AIR 1962 SC 1733). Khandige Sham Bhatt v.
Agricultural Income Tax Officer, 1963 (3) SCR 809:
(AIR 1963 SC 591) and State of Andhra Pradesh v.
Nalla Raja Reddy, 1967 (3) SCR 28: (AIR 1967 SC
1458). But in view of the inherent complexity of fiscal
adjustment of diverse elements a larger discretion has
to be permitted to the Legislature for classification so
long as there is no transgression of the fundamental
principles underlying the doctrine of classification of
1963 (3) SCR 809: (AIR 1963 SC 591). These
principles are that the classification must be based on
an intelligible differentia which distinguishes persons
or objects grouped together from others left out of the
group, and that differentia must have a rational nexus
with the object of the statute. So long as these
principles are properly followed in classifying persons
or objects for taxation, the power to classify must be
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wide and flexible so as to enable the Legislature to
adjust its system of taxation in all proper and
reasonable ways. (see 1963 (3) SCR 809: (AIR 1963
SC 591)).
15. It is well recognised that a Legislature does not have to
tax
everything in order to tax something. It can pick and
choose districts, objects, persons, methods and even
rates of taxation
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as long as it does so reasonably (Willis Constitution

Law of the United States, 587). A taxing statute is not
invalid on the ground of discrimination merely
because other objects could have been but are not
taxed by the legislature. (Ravi Varma v. Union of India
1969 (3) SCR 827: (AIR 1969 SC 1094).) When a
statute divides the objects of tax into groups or
categories, so long as there is equality and uniformity
within each group the tax cannot be attacked on the
ground of its being discriminatory, although due to
fortuitous circumstances or a particular situation some
included in a class or group may get some advantage
over others, provided of course they are not sought out
for special treatment: (1963 (3) SCR 809: (AIR 1963
SC 591). Likewise the mere fact that a tax falls more
heavily on some in the same group or category is by
itself not a ground for its invalidity, for then hardly
any tax, for instance, sales tax and excise tax, can
escape such a charge. (Twyford Tea Co. Ltd. v. State
of Kerala 1970 (3) SCR 383: (AIR 1970 SC 1133).)
16. Definitions of taxation imply that a legislature can
impose a tax for public purposes only. A tax for
purposes other than public purposes would
constitute taking of property without due process of
law within the meaning of the Fourteenth Amendment
in the United States. It would be objectionable in this
country by reason of Art.31 (1) of the Constitution.
(Cooley on Taxation (4th ed.), Vol.1, 381, 382)
Taxation, however, is, nonetheless, for public purpose
even if particular persons receive more benefit from
the use of the tax proceeds than others. (Ibid 392).”
65. Levy of taxes, the solemn function, is an attribute of
sovereignty. It is an unavoidable necessity. No Government
can run without tax collection. The tax cannot constitute
imposing regulatory restrictions on free trade and commerce.
The tax is a compulsory collection by the State to support its
welfare activities. Article 265 of the Constitution of India
provides that no tax shall be levied or collected except by the
authority of law. Therefore, there can be no levy or collection
of tax by the exercise of the executive power.

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66. In State of West Bengal v Kesoram Industries Limited
& others [(2000) 1 SCC 710], it was held that the power of
taxation is
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an inherent attribute of sovereignty emanating from necessity.
The same view was expressed in Yadlapati Venkateswarlu v.
State of Andhra Pradesh & another [1992 Supp (1) SCC 74].
67. Mr. Thomas Mclntyre Cooley, in his famous
Treatise ‘The Law of Taxation’, stated that ‘taxation’ is a mode
of raising revenue for the public purpose, and the power of
taxation is an essential and inherent attribute of Sovereignty,
belonging as a matter of right to every independent
Government. It is a power inherent to the sovereign State to
recover a contribution of money or other property in
accordance with some reasonable rule of apportionment from
the property or occupation within its jurisdiction for the
purpose of defraying public expenses.
68. In Smt Ujjam Bai v. State of Uttar Pradesh [1962 AIR
1621] the Supreme Court summed up the aspects of valid
taxation as follows:
“(1)A tax will be valid only if it is authorised by

a law enacted by a competent legislature
(Article 265 of the Constitution of India).
(2) A law which is authorized as aforesaid must
further be not repugnant to any of the
provisions of the Constitution. Thus, a law
which contravenes Article 14 of the
Constitution will be bad.
(3) A law which is made by a competent
legislature and which is not otherwise invalid, is
not open to attack under Article 31(1) of the
Constitution.
(4) A law which is ultra vires either because the
legislature has no competence over it or it
contravenes, some constitutional inhibition has
no legal existence, and any action taken
thereunder will be an infringement of Article
19(1)(g) of the Constitution and it would
amount to a colourable piece of legislation.
(5) where assessment proceedings are taken
without the authority of law, or where the
proceedings are repugnant to rules of natural
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justice, there is an infringement of the right
guaranteed under Article 19(1)(f) and Article
19(1)(g) of the Constitution.”
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The majority judgment of the above case sums up the
Constitutional limitations on the power of the State legislature
to levy taxes or enact legislation if the field is reserved for
them under the relevant entries of List II and III of the
Seventh Schedule.
69. The power to levy tax is a sovereign power
controlled only by the Constitution, and any limitation on that
power must be express one. Unless and until the Court finds or
arrives at a conclusion that the Constitution itself has
expressly prohibited legislation on the subject either
absolutely or conditionally, the power of the Central/State to
enact legislation within its legislative competence is a plenary
power.
70. In the case of State of Karnataka v.M/s. M K Agro
Tech Private Limited [(2017) 16 SCC 210] it has been held that
taxing statutes are to be interpreted literally, and further, it is
the legislature's domain as to how the tax credit is to be given
and under what circumstances.
In paragraph 32, the Supreme Court observed as under:
“32. Fourthly, the entire scheme of the KVAT

Act is to be kept in mind and Section 17 is to be
applied in that context. Sunflower oil cake is
subject to input tax. The legislature, however,
has incorporated the provision, in the form of
Section 10, to give tax credit in respect of such
goods which are used as inputs/raw material for
manufacturing other goods. Rationale behind
the same is simple. When the finished product,
after manufacture, is sold, VAT would be again
payable thereon. This VAT is payable on the
price at which such goods are sold, costing
whereof is done keeping in view the expenses
involved in the manufacture of such goods plus
the profits which the manufacturer intends to
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earn. Insofar as costing is concerned, element
of expenses incurred on raw material would be
included. In this manner, when the final product
is sold and the VAT paid, component of raw
material would be included again. Keeping in
view this objective, the legislature has intended
to give tax credit to some extent. However,
how much tax credit is to be given
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and under what circumstances, is the domain of

the legislature and the courts are not to tinker
with the same."
Considering the decisions and discussions, it can be said
that both Central and State legislation have the power to enact
the CGST/SGST Act, and the Constitution prescribes no
limitation for enacting such legislation. Therefore, these
legislations are valid legislations.
Issue No.II:What is the nature of the claim to Input Tax Credit under
the
scheme of the GST Act and the Rules made thereunder?
71. The Input Tax Credit is in the nature of a benefit or
concession extended to the dealer under the statutory
scheme. Even if it is held to be an entitlement, this
entitlement is subject to the restrictions as provided under the
Scheme or the Statute. The claim to Input Tax Credit is not an
absolute right, but it can be said that it is an entitlement
subject to the conditions and restrictions as envisaged in
Sections 16(2) to 16(4), Section 43, and Rules made
thereunder.
72. In the case of Godrej & Boyce Manufacturing
Company Pvt. Ltd & others v. Commissioner of Sales Tax & others
[(1992) 3 SCC 624], the Supreme Court, while dealing with
Rules 41 and 41A of the Bombay Sales Tax Rules 1959, held
that the rule-making authority would be empowered to
provide for abridgement or curtailment while extending a
concession.
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In paragraph 9 of the said judgment, the Supreme Court
held as follows:
“9. Sri Bobde appearing for the appellants

reiterated the contentions urged before the
High Court. He
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submitted that the deduction of one per cent, in

effect, amounts to taxing the raw material
purchased outside the State or to taxing the
sale of finished goods effected outside the
State of Maharashtra. We cannot agree.
Indeed, the whole issue can be put in simpler
terms. The appellant (manufacturing dealer)
purchases his raw material both within the
State of Maharashtra and outside the State.
Insofar as the purchases made outside the
State of Maharashtra are concerned, the tax
thereon is paid to other States. The State of
Maharashtra gets the tax only in respect of
purchases made by the appellant within the
State. So far as the sales tax leviable on the
sale of the goods manufactured by the
appellant is concerned, the State of
Maharashtra can levy and collect such tax only
in respect of sales effected within the State of
Maharashtra. It cannot levy or collect tax in
respect of goods which are despatched by the
appellant to his branches and agents outside
the State of Maharashtra and sold there. In law
(apart from Rules 41 and 41-A) the appellant
has no legal right to claim set-off of the
purchase tax paid by him on his purchases
within the State from out of the sales tax
payable by him on the sale of the goods
manufactured by him. It is only by virtue of the
said Rules which, as stated above, are
conceived mainly in the interest of public - that
he is entitled to such set-off. It is really a
concession and an indulgence. More
particularly, where the manufactured goods
are not sold within the State of Maharashtra
but are despatched to out State branches and
agents and sold there, no sales tax can be or is
levied by the State of Maharashtra. The State
of Maharashtra gets nothing in respect of such
sales effected outside the State. In respect of
such sales, the rule-making authority could
well have denied the benefit of set-off. But it
chose to be generous and has extended the
said benefit to such out-State sales as well,
subject, however to deduction of one per cent
of the sale price of such goods sent out of the
State and sold there. We fail to understand how
a valid grievance can be made in respect of
such deduction when the very extension of the
benefit of set-off is itself a boon or a
concession. It was open to the rule-making
authority to provide for a small abridgement or
curtailment while extending a concession.
Viewed from this angle, the argument that
providing for such
deduction amounts to the levy of tax either on
purchases of raw material effected outside the
State or on sale of manufactured goods
effected outside the State of Maharashtra
appears to be beside the point and is
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unacceptable. So is the argument about
apportioning the sale price with reference to
the proportion in which raw material was
purchased within and outside the State."
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73. In the case of India Agencies (Regd.) v. Additional
Commissioner of Commercial Taxes [(2005) 2 SCC 129] while
dealing with Rule 6(b)(ii) of the Central Sales Tax (Karnataka)
Rules, 1957, which requires a provision for furnishing original
Form C to claim concessional rate of tax under Section 8(1) of
the Central Sales Tax Act 1956 held that the said requirement
under the rule is mandatory and without producing the
specific documents, the dealer could not be entitled to claim
benefits.
In paragraph 13 of the said judgment, the Supreme Court
held as follows:
"13. Under the Central Sales Tax (Karnataka)

Rules, 1957, the dealer is required to submit
along with his return the original of the
prescribed forms. As could be seen from the
rule extracted above, a registered dealer who
claims that he has made a sale to another
registered dealer is required to attach the
original of the declaration forms on the
certificate in the prescribed form received by
him from the prescribed dealer along with his
return filed by him. We have already extracted
Section 13 of the Central Sales Tax Act, which
deals with the power of the Central
Government to make rules, the form and the
manner for furnishing declaration under sub-
section (8) of Section 8. Sub-section (3) of
Section 13 provides that the State Government
may make rules not inconsistent with the
provisions of the Central Sales Tax Act, 1956
and the rules made under sub-section (1) to
carry out the purposes of the Act. In exercise of
the powers conferred by sub-sections (3), (4)
and (5) of Section 13 of the Central Sales Tax,
1956, the Government of Karnataka made the
Central Sales Tax (Karnataka) Rules, 1957.
Under Rule 6(b)(ii) of the Karnataka Rules, the
State Government has prescribed the
procedures to be followed and the documents
to be produced for claiming concessional rate
of tax under Section 8(4) of the Central Sales
Tax Act. Thus, the dealer has to strictly follow
the procedure and Rule 6(b)(ii) and produce
the relevant materials required under the said
rule. Without producing the specified
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documents as prescribed thereunder a dealer
cannot claim the benefits provided under
Section 8 of the Act. Therefore, we are of the
opinion that the requirements contained in
Rule 6(b)(i) of the Central Sales Tax
(Karnataka) Rules, 1957 are mandatory.
Sections
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12(1), (2) and (3) of the Central Sales Tax

(R&T) Rules, 1957 provide that the registered
dealer is required to file the declaration and
the certificate referred to in Section 8(4) in
Form C and D respectively. Form C is a
declaration divided into three parts. All the
three parts are identical, the first part of the
form being the counter foil and the second
part being the duplicate and the third part
being the original. The counter foil is to be
retained by the purchasing dealer. The original
is to be filed before the Assessing Officer by
the selling dealer to claim the concessional
rate. The duplicate is to be retained by the
selling dealer. If the C Form or the original
part of it is lost whilst in the custody of the
purchasing dealer or in transit, the purchasing
dealer shall have to furnish an indemnity bond
for the same as fixed by the authority
concerned. If the original part of C Form is lost
by the selling dealer whilst it is in his custody
or in transit, the selling dealer shall furnish an
indemnity bond as fixed by the authority
concerned and follow the procedure prescribed
under Rule 12(3)."
74. In the case of Jayam & Co. v.Assistant Commissioner &
Another [(2016) 15 SCC 125], while interpreting the provisions of
Sections 19(20), 3(2) and 3(3) of the Tamil Nadu Value Added
Tax Act 2006, it has been held that the Input Tax Credit is a
form of concession provided by the legislature. It is not
admissible to all kinds of sales, and certain specified sales are
specifically excluded.
75. In ALD Automotive (P) Limited v. Commercial Tax
Officer [(2019) 13 SCC 225], considering the earlier decisions, the
Supreme Court has held that input tax credit is admissible
only as per the conditions of the Tamil Nadu Value Added Tax
Act 2006. In paragraph 43, the Supreme Court observed as
under:
“43. Section 19(11) thus allowed an

extended period for input credit which if not
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claimed in any month can be claimed before
the end of the financial year or before the 90
days from the date of purchase whichever is
later. The provision of Section 19(11) is thus an
additional benefit given to dealer for claiming
input credit in extended period. The use of the
word "shall make the claim" needs no other
interpretation."
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76. In Union of India & others V. VKC Footsteps (India) (P)
Limited [(2022) 2 SCC 603], while considering the issue with
respect to the refund of additional ITC, the Rule limited the
refund of unutilised ITC to input goods alone.
Upholding the aforesaid rule, the Supreme Court held in
paragraphs 88 and 90 as under:
“88. The jurisprudential basis furnishes a

depiction of an ideal state of existence of GST
legislation within the purview of a modern
economy, as a destination-based tax. But there
can be no gain saying the fact that fiscal
legislation around the world, India being no
exception, makes complex balances founded
upon socio-economic and concession of ITC is
available on certain conditions, and observed
as under:
"11. From the aforesaid scheme of Section 19
the following significant aspects emerge:
(a) ITC is a form of concession provided by the
legislature. It is not admissible to all kinds of
sales and certain specified sales are
specifically excluded.
(b) Concession of ITC is available on certain
conditions mentioned in this section.
(c) One of the most important condition is that
in order to enable the dealer to claim ITC it has
to produce original tax invoice, completed in all
respect, evidencing the amount of input tax."
Their Lordships further held that it is a trite
law that whenever concession is given by a
statute the conditions thereof are to be strictly
complied with in order to avail such
concession, and observed in paragraph 12 as
under:
"12. It is trite law that whenever concession
is given by statute or notification, etc. the
conditions thereof are to be strictly complied
with in order to avail such concession. Thus, it
is not the right of the "dealers" to get the
benefit of ITC but it is a concession granted by
virtue of Section 19. As a fortiori, conditions
specified in Section 10 must be fulfilled. In
that hue, we find that Section 10 makes
original tax invoice relevant for the purpose of
claiming tax. Therefore, under the scheme of
the VAT Act, it is not permissible for the
dealers to argue that the price as indicated in
the tax invoice should not have been taken into
consideration but the net purchase price after
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discount is to be the basis. If we were dealing
with any other aspect dehors the issue of ITC
as per Section 19 of the VAT Act, possibly the
arguments of Mr Bagaria would have assumed
some relevance. But, keeping provided. If the
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legislature has intended that the equivalence

between goods and services should be
progressively realised and that for the purpose
of determining whether refund should be
provided, a restriction of the kind which has
been imposed in clause (ii) of the proviso
should be enacted, it lies within the realm of
policy.
xxx xxx xxx
90. GST legislation in India is the product of
hard constitutional and legislative work which
stretched over several decades. Our fiscal
regime is yet to arrive at an ideological position
of one bundle for goods and services based on
a single rate structure. Broadly speaking,
goods and services are taxed at 5%, 12%, 18%
and 40%. As on date, there is an absence of
uniformity in rates and it is the multiplicity of
rates which has given rise to an inverted duty
structure. Registered persons with unutilised
ITC may conceivably form one class but it is
not possible to ignore that this class consists of
species of different hues. Given these intrinsic
complexities, the legislature has to draw the
balance when it decides upon granting a refund
of accumulated ITC which has remained
unutilised. In doing so, Parliament while
enacting sub-section (3) of Section 54 has
stipulated that no refund of unutilised ITC shall
be allowed other than in the two specific
situations envisaged in clauses
(i) and (ii) of the first proviso. Whereas clause (i) has
dealt with zero-rated supplies made without
the payment of tax, clause (ii), which governs
domestic supplies, has envisaged a more
restricted ambit where the credit has
accumulated on account of the rate of tax on
inputs being higher than the rate of tax on
output supplies. While the CGST Act defines
the expression "input" in Section 2(59) by
bracketing it with goods other than capital
goods, it is true that the plural expression
"inputs" has not been specifically defined. But
there is no reason why the ordinary principle of
construing the plural in the same plane as the
singular should not be applied. To construe
"inputs" so as to include both input goods and
input services would do violence to the
provisions of Section 54(3) and would run
contrary to the terms of Explanation I which
have been complexities and diversities which
permeate each society. The form which a GST
legislation in a unitary State may take will
vary considerably from its avatar in a nation
such as India where a dual system of GST law
operates within the context of a federal
structure. The ideal of a GST framework which
Article 279-A(6) embodies has to be
progressively realised. The doctrines which
have been emphasised by the counsel during
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the course of the arguments furnish the
underlying rationale for the enactment of the
law but cannot furnish either a valid basis for
judicial review of the legislation or make out a
ground for invalidating a validly enacted law
unless it infringes constitutional parameters.
While adopting the constitutional framework of
a GST regime, Parliament in the exercise of its
constituent power has
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had to make and draw balances to

accommodate the interests of the States. Taxes
on alcohol for human consumption and stamp
duties provide a significant part of the
revenues of the States. Complex balances have
had to be drawn so as to accommodate the
concerns of the States before bringing them
within the umbrella of GST. These aspects must
be borne in mind while assessing the
jurisprudential vision and the economic
rationale for GST legislation. But abstract
doctrine cannot be a ground for the Court to
undertake the task of redrawing the text or
context of a statutory provision. This is clearly
an area of law where judicial interpretation
cannot be ahead of policy making. Fiscal policy
ought not be dictated through the judgments
of the High Courts or this Court. For it is not
the function of the Court in the fiscal arena to
compel Parliament to go further and to do
more by, for instance, expanding the coverage
of the legislation (to liquor, stamp duty and
petroleum) or to bring in uniformity of rates.
This would constitute an impermissible judicial
encroachment on legislative power. Likewise,
when the first proviso to Section 54(3) has
provided for a restriction on the entitlement to
refund it would be impermissible for the Court
to redraw the boundaries or to expand the
provision for refund beyond what the
legislature has by a proprietorship firm namely,
M/s Jain Brothers through its Proprietor Mr.
Amit Jain.”
77. Thus, from the aforesaid decisions and discussions,
the nature of the claim for ITC by the dealer is in the nature
of concession or entitlement, which is not an absolute right
and is subject to the conditions and restrictions as per the
scheme of the GST legislation. This Court, therefore, does
not find substance in the submissions of the learned Counsel
for the petitioners that Section 16(1) of the GST Act provides
an absolute right to claim Input Tax Credit and conditions in
sub-section (2) of Section 16 cannot take away the right
conferred under sub-section (1) of Section 16.

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Issue No.III Whether Section 16(2)(c) and Section 16(4) of
the
CGST/SGST Act infringe the Constitutional provisions and are
unsustainable?
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78. The Supreme Court in Reserve Bank of India v. Peerless
General Finance and Investments Co. Ltd & Others [(1987) 1 SCC
424] in paragraph 37 has held that the text and context of a
taxing statute cannot be construed in isolation. The context
and scheme of the Statute give meaning, and therefore, the
same has to be taken into consideration while interpreting a
Statute.
Paragraph 37 of the said judgment is extracted hereunder:
“37. We would also like to query what action

of Reserve Bank of India and the Union of India
are taking or proposing to take against the
mushroom growth of 'finance and investment
companies' offering staggeringly high rates of
interest to depositors leading us to suspect
whether these companies are not speculative
ventures floated to attract unwary and
credulous investors and capture their savings.
One has only to look at the morning's
newspaper to be greeted by advertisements
inviting deposits and offering interest at
astronomic rates. On January 1, 1987, one of
the national newspapers published from
Hyderabad, where one of us happened to be
spending the vacation, carried as many as ten
advertisements with 'banner headlines',
covering the whole of the last page, a quarter
of the first page and conspicuous spaces in
other pages offering fabulous rates of interest.
At least two of the advertisers offered to double
the deposit in 30 months, 2000 for 1000,
10,000 for 5000, they said. Another advertiser
offered interest ranging between 30 per cent
to 38 per cent for periods ranging between six
months to five years. Almost all the advertisers
offered extra interest ranging between 3 per
cent to 6 per cent if deposits were made during
the Christmas-Pongal season. Several of them
offered gifts and prizes. If the Reserve Bank of
India considers the Peerless Company with
eight hundred crores invested in government
securities, fixed deposits with National Banks
etc. unsafe for depositors, one wonders what
they have to say about the mushroom non-
banking companies which are accepting
deposits, promising most unlikely returns and
what action is proposed to be taken to protect
the investors. It does not require much
imagination to realise the adventurous and
precarious character of these businesses.
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Urgent action appears to be called for to
protect the public. While on the one hand these
schemes encourage two vices affecting public
economy, the desire to make quick and easy
money and the habit of excessive and wasteful
consumer spending, on the other hand the
investors
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who generally belong to the gullible and less

affluent classes have no security whatsoever.
Action appears imperative.”
79. The Goods and Services Tax laws came into force in
2017, having the way for One India, One Market, One Tax. It is
a destination- based consumption tax with ITC available on
payment of tax on supply of goods or services at each stage
available in the next stage of value addition, removing
cascading effect irrespective of the destination, be it an intra-
state or inter-state supply. The dual VAT system with uniform
rates, simultaneous levy by the Centre and the States, and a
unique IGST model ensures this destination-based tax
compliance in all parts of India. The GST system minimises
the disadvantages of entirely independent (erstwhile State
VAT laws) and completely centralised systems. The flow of
ITC, along with the supply chain of registered persons,
ensures removing the cascading effect on one hand and the tax
collection by a self-assessment method in every tax period on
the other hand. It has to happen simultaneously in a financial
year.
80. In Willowood Chemicals v Union of India [2018 58
GSTR 310 (Guj)], it has been held that granting tax credit cannot
be allowed to linger on indefinitely, for it would impact
revenue collection for each financial year and budgetary
allocations and, in rem, revenue deficit. Paragraphs 30 and 35
of the said judgment are extracted hereunder:

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“30. Issue can be looked at from slightly
different angle. Granting tax credit is an
integral part of computation and collection of
tax. Tax collection is an important element of
budgetary allocations and estimation of the
Union and the States. Such
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consideration of tax credits at such large scale

cannot be allowed to linger on indefinitely
which would have a direct effect on the tax
collection, estimates and budgetary allocations
and in turn, revenue deficit.
xxx xxx xxx
35. Thus, in the economic matters of such
vast scale, the wider considerations of the
State exchequer, while interpreting a
statutory provisions cannot be kept out of
purview. Quite apart from independently
finding that the time-limit provisions contained
in sub-rule (1) of rule 117 of the CGST Rules
is not ultra vires the Act or the powers of the
rule-making authority, interpreting such
powers as merely directory would give rise to
unending claims of transfer of credit of tax on
inputs and such other claims from old to the
new regime. Under the new GST laws, the
existing tax structure was being replaced by
the new set of statutes, through an exercise
which was unprecedented in the Indian
context. The claims of carry forward of the
existing duties and credits during the period
of migration, therefore, had to be within the
prescribed time. Doing away with the time-
limit for making declarations could give rise
to multiple large- scale claims trickling in for
years together after the new tax structure is
put in place. This would besides making the
task of matching of the credits impractical if
not impossible, also impact the revenue
collection estimates. It is in this context that
the Supreme Court in the case of Mafatlal
Industries Ltd. [1998] 111 STC
467 (SC) ; [1997] 5 SCC 536, after rejecting the
contention that a person can move proceedings
for recovery of tax paid upon success of some
other person before the Tribunal or court in
getting such tax collection declared illegal, was
further influenced by the fact that any such
situation could lead to utter chaos, if the claims
are large. Under the circumstances, we do not
find any substance in the petitioners' challenge
to rule 117(1) of the CGST Rules as well as
GGST Rules.”
81. When the ITC is not an absolute right but is an
entitlement subject to the conditions and restrictions
prescribed under the Statute, the conditions, restrictions and
time limit specified by law form the fulcrum on which the
grant of ITC and tax collection for each financial year are
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balanced. The Scheme of the Act also provides that only tax
collected and paid to the government could be given as input
tax credit. When the Government has not received the tax, a
dealer cannot be
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given an input tax credit. It may be seen that under the
various State VAT laws, the twin requirements were provided
for granting ITC: (a) it was aimed to remove the cascading
effect, and (b) collection of Tax for each financial year. The
State legislations had to balance this linear bar. Under the
VAT law, the ITC did not cross the originating State. The
Central Sales Tax levied on inter-state sale of goods was
assigned to the original State.
82. Under the GST regime, the tax collected has to be
assigned to the jurisdiction where the consumption takes
place. The ITC, therefore, crosses a State during inter-State
supplies. Now, the scheme of the Act prescribes the
conditions, restrictions, time limit, and the manner for availing
the ITC and all together form the legal fulcrum that balances
three requirements:
(a) granting of ITC for removing cascading effect,
(b) achieving collection of tax by self-assessment method for
each financial year, and
(c) ITC transfer compliance to the destination State on inter-
state supplies through the IGST mechanism where the Centre
collects tax equivalent to CGST + SGST.
An inter-State supplier in the originating/exporting State
uses his CGST/SGST credit for payment of IGST collected.
The recipient based in the destination State will discharge his
output tax liability (CGST + SGST) by claiming credit for the

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IGST he paid to the inter-state supplier in the originating
State. Now, the Central and the originating State

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have an obligation to transfer the CGST and SGST
component utilised by the inter-state supplier to the IGST
account so as to make it available for the destination State.
Section 53 of the CGST/SGST Act prescribes the statutory
obligation of the Central and the State Governments in this
regard, which reads as follows:
“Section 53: Transfer of Input Tax credit On

utilisation of input tax credit availed under this
Act for payment of tax dues under the
Integrated Goods and Services Tax Act in
accordance with the provisions of sub-section
(5) of section 49, as reflected in the valid
return furnished under sub-section (1) of
section 39, the amount collected as central tax
shall stand reduced by an amount equal to
such credit so utilised and the Central
Government shall transfer an amount equal to
the amount so reduced from the central tax
account to the integrated tax account in such
manner and within such time as may be
prescribed." (State laws have Section 53
parallel provision)
83. Considering the aforesaid scenario, without Section
16(2)(c) where the inter-state supplier’s supplier in the
originating State defaults payment of tax (SGST+CGST
collected) and the inter-state supplier is allowed to take credit
based on their invoice, the originating State Government will
have to transfer the amounts it never received in the tax
period in a financial year to the destination States, causing
loss to the tune of several crores in each tax period.
84. In my view, this renders the whole GST laws and
schemes unworkable. Therefore, as contended, the conditions
cannot be said to be onerous or in violation of the Constitution,
and Section 16(2)(c) is neither unconstitutional nor onerous on

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the taxpayer.
85. The collection of tax by self-assessment and
the Recovery Provisions on default are two different
arms. The
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respondents cannot contend that the conditions,
restrictions, and time limits for ITC and time-bound tax
collection in a financial year can be substituted or
replaced with recovery actions against defaulters, the
outcome of which is uncertain and not time-bound.
86. Section 16 of the CGST Act and Rules made
thereunder provide conditions, restrictions, time limits
and manners for availing the Input Tax Credit, which is a
self-monitoring and self- policing provision. In order to
claim ITC, each registered person has a reason and
incentive to request documentation and tax payment
compliance from the person behind him in the value-
added tax chain to ensure that the ITC chain is not
broken. A new provision, Section 16(2)(aa), stands
introduced with effect from 01.01.2022, providing for
communication of the matching of the recipient’s invoice
with suppliers and outward supply via GSTR 2A/2B. With
effect from 01.10.2022, Section 38 stands substituted
with a provision for auto-generated statement GSTR 2B,
indicating eligible and ineligible credits in respect of the
inward supply. Section 41 is also substituted providing for
reversal and re- availing of credit. Prior to that, the
unamended Section 41, now substituted, provided that

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the supplier can take only eligible input tax as self-
assessed in his return, and that amount would be credited
on a provisional basis to the electronic credit ledger
and
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can be utilized for payment of self-assessed output tax.
The manner of crediting was also provided under Section
49(2).
87. Prior to the 01.01.2022 amendment in the
CGST/SGST Act, the eligible credit had to be
determined by the taxpayer based on the supplier’s
GSTR 1 reflected in GSTR 2A and by verifying his books
of account and supplier’s GSTR 3B return filed online.
This procedure has been explained by the Supreme
Court in the case of (Union of India v. Bharti Airtel and
others, [2022) 4 SCC 328].
Paragraphs 33 to 35 of the said judgment, which is

extracted
hereunder: --
“33. As per the scheme of the 2017 Act, it

is noticed that registered person is obliged to
do self- assessment of ITC, reckon its eligibility
to ITC and of OTL including the balance
amount lying in cash or credit ledger primarily
on the basis of his office record and books of
accounts required to be statutorily preserved
and updated from time to time. That he
could do even without the common electronic
portal as was being done in the past
till recently pre-GST regime. As regards
liability to pay OTL, that is on the basis of the
transactions effected during the relevant
period giving rise to taxable event. The
supply of goods and services becomes taxable
in respect of which the registered person
is obliged to maintain agreement,
invoices/challans and books of accounts,
which can be maintained
manually/electronically. The common portal
is only a facilitator to feed or retrieve such
information and need not be the primary
source for doing self assessment. The
primary source is in the form of
agreements, invoices/challans, receipts of the
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goods and services and books of accounts
which are maintained
by the assessee manually
/electronically. These are not within the
control of the tax authorities. This was the
arrangement even in the pre-GST regime
whilst discharging the obligation under
the concerned legislation(s). The position is no
different in the post GST regime, both in the
matter
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of doing self assessment and regarding dealing

with eligibility to ITC and OTL. Indeed, that
self assessment and declarations would be
any way subject to verification by the tax
authorities. The role of tax authorities would
come at the time of verification of the
declarations and returns submitted/filed by the
registered person.
34. Section 16 of the 2017 Act deals with
eligibility of the registered person to take
credit of input tax charged on any supply of
goods or services or both to him which are
used or intended to be used in the course or
furtherance of his business. The input tax
credit is additionally recorded in the electronic
credit ledger of such person under the Act.
The “electronic credit ledger” is defined in
Section 2(46) and is referred to in Section
49(2) of the 2017 Act, which provides for the
manner in which ITC may be availed. Section
41(1) envisages that every registered person
shall be entitled to take credit of eligible input
tax, as self-assessed, in his return and such
amount shall be credited on a provisional basis
to his electronic credit ledger.
35. As aforesaid, every assessee is under obligation to
self-assess the eligible ITC under
Section16(1)and 16(2) and “credit the same in
the electronic credit ledger” defined in Section
2(46) read with Section 49(2) of the 2017 Act.
Only thereafter, Section 59 steps in,
whereunder the registered person is obliged
to self-assess the taxes payable under the
Act and furnish a return for each tax period as
specified under Section 39 of the
Act. To put it differently, for submitting
return under Section 59, it is the
registered person who has to undertake
necessary measures including of maintaining
books of accounts for the relevant period either
manually or electronically. On the basis of
such primary material, self-assessment can be
and ought to be done by the assessee about
the eligibility and availing of ITC and of OTL,
which is reflected in the periodical return to be
filed under Section 59 of the Act.”
88. To complete the process and avail credit in respect
of inward supplies for a financial year, a recipient has a
maximum of 18 months to a minimum of 6 months under
Section 16(4) of the Act as it stood prior to 01.01.2022
for getting his invoice/debit note uploaded by the supplier

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of the tax paid and maximum 20 months to minimum 8
months after that. The time frame made it a

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reasonable mechanism for availing ITC in GST Laws. This
time limit is not a new phenomenon for availing the ITC.
The different VAT legislations and CENVAT Credit Rules
provided time limits to claim eligible ITC Under Rule 4 of
the Cenvat Credit Rules, 2004, where a one-year limit was
prescribed for ITC. The GST Laws, in fact, prescribe a
larger time limit.
89. Subsection 2 of Section 16 begins with the non-

obstante
clause and further says, “no registered person shall be
entitled to the credit of any input tax…..”. Sub-section (2)
of Section 16 is in double negative format, and the
conditions provided are restrictive conditions and not
conditions of eligibility, as held by the Supreme Court in
the case of VKC Footsteps (India) P Ltd (supra).
Paragraphs 86 and 87 of the said judgment which
are relevant are extracted hereunder:-
86. The above submissions demonstrate the

scholarship which has been brought to bear
upon the controversy by Counsel appearing on
behalf of the assessees. The above aspects of
the statutory provisions Section 54(3) must be
juxtaposed together with all the features of the
statutory provision including Explanation-1
which have been adverted to earlier. The
analysis earlier indicates why on a reading of
the provision as a whole, clauses (i) and (ii) of
the first proviso are restrictions and not mere
conditions of eligibility. It is not possible for
the Court to restrict the ambit of clause (ii) of
the proviso, based on a circular which has
been issued by the Ministry of Finance on 31
December 2018. In substance, the argument
boils down to an effort to lead this Court to
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hold that in spite of the language which has
been used in clause (ii) of the first proviso
(where the credit is accumulated on account
of rate of tax on inputs being higher than the
rate of tax on output supplies), input services
must be read into the term "inputs". The
assessees argue that the Departmental
understanding, as reflected in the circular,
should be
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the basis of interpreting a statutory provision.

Such an exercise would be impermissible,
when its effect is to expand the area of refund
contemplated by the first proviso to cover
input services in addition to input goods
despite statutory language to the contrary.
Sub- Section (3) of Section 54 begins, in its
main part, with the stipulation that a
registered person may claim refund of any
'unutilised ITC at the end of any tax period’.
Whether we construe the first proviso as an
exception or in the nature of a fresh
enactment, the clear intent of Parliament was
to confine the grant of refund to the two
categories spelt out in clauses (i) and (ii) of
the first proviso. That clauses (i) and (ii) are
the only two situation in which a refund can
be granted is evident from the opening words
of the first proviso which stipulates that "no
refund of unutilised input tax credit shall be
allowed in cases other than". What follows is
clauses (i) and (ii). The intent of Parliament is
evident by the use of a double negative format
by employing the expression "no refund" as
well as the expression "in cases other than". In
other words, a refund is contemplated in the
situations provided in clauses (1) and (ii) and
no other. To put it differently, the first proviso
can be recast, without altering its meaning to
read that a refund of unutilised ITC shall be
allowed only in the cases governed by clauses
(i) and (ii). Clause (i) deals with zero rated
supplies without payment of tax. Explanation-1
to Section 54 clarifies that the expression
'refund' includes refund of tax paid on zero
rated supplies on goods or services or both, or
on inputs or input services used in making
such zero- rated supplies. On the other hand,
in the case of deemed exports, Explanation-1
refers to a refund of tax on the supply of
goods. Likewise in regard to domestic supplies
Governed by clause (ii) of the first proviso, the
expression ‘refund’ means refund of unutilized
ITC as provided under sub-section (3). With
clear language which has been adopted by
Parliament while enacting the provisions of
Section 54 (3), the acceptance of the
submissions which has been urged on behalf of
the assessee would involve a judicial re-
writing of the provision which is impermissible
in law. Clause (ii) of the proviso when it
refers “ on account of “ clearly intends the
meaning which can ordinarily be said to imply
‘ because of or due to’. When proviso
(ii) refers to “ rate of tax”, it indicates a clear
intent that a refund would be allowed where
and only if the inverted duty structure has
arisen due to the rate of tax on input being
higher than the rate of tax on output supplies.
Reading the expression ‘input’ to cover input
goods and input services would lead to
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recognizing an entitlement to refund, beyond
what was contemplated by Parliament.
87. We must be cognizant of the fact that no
constitutional right to being asserted to claim
a refund, as there cannot be. Refund is a
matter of a statutory prescription. Parliament
was within its
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legislative authority in determining whether

refunds should be allowed of unutilised ITC
tracing its origin both to input goods and input
services or, as it has legislated, input goods
alone. By its clear stipulation that a refund
would be admissible only where the unutilised
ITC has accumulated on account of the rate of
tax on inputs being higher than the rate of tax
on output supplies, Parliament has confined
the refund in the manner which we have
described above. While recognizing an
entitlement to refund, it is opened to the
legislature to define the circumstances in
which refund can be claimed. The proviso to
Section 54(3) is not a condition of eligibility (as
the assesses’s counsel submitted) but a
restriction which must governed the grant of
refund under Section 54(3). we therefore,
accept the submission which has been urged
by Mr.
N. Venkataraman, learned ASG.
90. Thus, the non-obstante clause in the negative
sentence in Section 16(2) restricts the eligibility under
Section 16(1) for entitlement to claim ITC. Section 16(2)
is the restriction on eligibility and Section 16(4) is the
restriction on the time for availing ITC. These provisions
cannot be read to restrict other restrictive provisions, i.e.,
Section 16(3) and 16(4). If Section 16(2) is read in the
manner as contended by the learned counsel for the
petitioners, i.e., once the conditions under Section 16(2)
are met, the timeline provided for availing the input tax
credit under Section 16(4) is arbitrary and
unsustainable and cannot be accepted.
91. Few High courts have upheld the constitutional
validity of Section 16(2) (c) and 16(4). The Andhra

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Pradesh High Court in Thirumalakonda Plywoods v.
Assistant Commissioner [2023 SCC Online AP 1476] in
paragraph 19 as held as under: -

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“19. When analyzed, Section 16(2) shall not

appear to be a provision which allows input
tax credit, rather ITC enabling provision is
Section 16(1). On the other hand, Section
16(2) restricts the credit which is otherwise
allowed to only such cases where conditions
prescribed in it are satisfied. Therefore,
Section 16(2) in terms only overrides the
provision which enables the ITC i.e., Section
16(1). This is evident from the manner in
which Section 16(2) is couched. The non
obstante clause in Section 16(2) is followed by
a negative sentence “no registered person
shall be entitled to the credit of any input tax
in respect of any supply of goods or services or
both to him unless”. This negative sentence
pellucidly tells that unless the conditions
mentioned in Section 16(2) are satisfied, no
credit will be eligible. This stipulation
manifests that Section 16(2) is not an enabling
provision but a restricting provision. What it
restricts is the eligibility which was otherwise
given U/s 16(1).
(a) It should be noted, when a non obstante clause is a
mere restricting provision, an interpretation
that the other restricting provisions will not
have effect or that the restricting provision will
restrict other restricting provisions cannot be
accepted for the reason that there is no
contradiction between the restricting clause
followed by non obstante and other restricting
provisions.
In R.S. Raghunath’s case (supra-21) the Apex
Court held thus:
“11. Xxxx. The non-obstante clause is
sometimes appended to a section or a rule in
the beginning with a view to give the enacting
part of that section or rule in case of conflict,
an overriding effect over the provisions or act
mentioned in that clause. Such a clause is
usually used in the provision to indicate that
the said provision should prevail despite
anything to the contrary in the provision
mentioned in such non- obstante clause.
” Hence unless such clear inconsistency is
established, overriding effect cannot be given
over other provisions. In the present case both
Section 16(2) and (4) are two different
restricting provisions, the former providing
eligibility conditions and the later imposing
time limit. However, both these provisions
have no inconsistency between them. In
R.S. Raghunath, the Apex Court further
observed thus:
“But the non-obstante clause need not
necessarily and always be co-extensive with
the operative part so as to have the effect of
cutting down the clear terms of an enactment
and if the words of the enactment are clear
and are capable of a clear interpretation on a
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plain and grammatical construction of the
words the non-obstante clause cannot cut
down the construction and restrict the scope
of its operation. In such cases the non-
obstante clause has to be read as clarifying
the whole position and must be understood to
have been incorporated in the enactment by
the
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Legislature by way of abundant caution and

not by way of limiting the ambit and scope of
the Special Rules.
” Further, the influence of a non obstante

clause has to be considered on the basis of the
context also in which it is used. Therefore,
Section 16(4) being a non- contradictory
provision and capable of clear interpretation,
will not be overridden by non obstante
provision U/s 16(2). As already stated supra
16(4) only prescribes time restriction to avail
credit. For this reason, the argument that
16(2) overrides 16(4) is not correct. Thus, in
substance Section 16(1) is an enabling clause
for ITC; 16(2) subjects such entitlement to
certain conditions; Section 16(3) and
(4) further restrict the entitlement given U/s
16(1). That being the scheme of the provision,
it is out of context to contend that one of the
restricting provisions overrides other two
restrictions. The issue can be looked into
otherwise also. If really the legislature has no
intention to impose time limitation for availing
ITC, there was no necessity to insert a specific
provision U/s 16(4) and to further intend to
override it through Section 16(2) which is a
futile exercise.”
92. Section 16(1) is subject to Section 49 and Section

16(2)
(c) is subject to Section 41. Eligible ITC is self-assessed
in the GSTR 3B return, and only then it is credited to the
electronic credit ledger, which can be utilised for
payment of tax. The Supreme Court in Union of India v.
Bharati Airtel and others (supra) has explained the
procedure for availing the input tax credit under the GST
laws. [As has been extracted in paragraph 86 of this
judgment].
93. The Patna High Court in Gobinda Construction and
others v. Union of India and others [MANU/BH/1260/2023],

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after placing reliance on the judgment in Jayam, ALD
(supra) has upheld the constitutional validity of Section
16(4) and held that

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the concession/claim to ITC is not an absolute legal
right. Paragraphs 22 to 30 of the said judgment are
extracted hereunder:-
“22. In the background of the above noted

discussions, we need to examine first as to whether
or not, the language of Section 16 of the
CGST/BGST Act suffers from any ambiguity. Sub-
section (1) of Section 16 , which provides for ITC,
states that every registered person shall be entitled
to take credit of input tax charged on any supply of
goods or services or both to them, which are used
or intended to be used in accordance with the
furtherance of his business and the said amount
shall be credited to the electronic credit ledger of
such person. This entitlement of ITC is, however,
subject to :-
(a) such conditions and restrictions as may be
prescribed and,
(b) in the manner specified in Section 49
23. Sub-section (2) of Section 16 is a non obstante
clause and clearly states that no registered person
shall be entitled to the credit of input tax in respect
of any supply of goods or services or both unless he
fulfills the requirements and satisfies the existence
of other conditions prescribed in Clauses (a) to (d)
thereof.
24. Sub-section (3) of Section 16 contemplates yet
another circumstance when ITC on tax component
cannot be allowed, i.e., where the registered
person has claimed depreciation on the tax
component of cost of capital goods and plant and
machinery under the provisions of the Income Tax
Act, 1961.
25. Lastly comes the offending clause which is
under challenge i.e. sub-section (4) of Section 16 of
the CGST/BGST Act, which, in no unambiguous
terms, provides that a registered person shall not be
entitled to take ITC in respect of any invoice or
debit note for supply of goods or services or both
after 30th day of November (post amendment),
following the end of financial year to which such
invoices or debit note pertain or furnishing of the
relevant annual return, whichever is earlier. The
language of Section 16 of the CGST/BGST Act
suffers from no ambiguity and clearly stipulates
grant of ITC subject to the conditions and
restrictions put thereunder.
26. At the cost of repetition, we note here that ITC is
not unconditional and a registered person becomes
entitled to ITC only if the requisite conditions
stipulated therein are fulfilled and the restrictions
contemplated under sub-section
(2) of Section 16 do not apply. One of the conditions to
make a registered person entitled to take ITC is
prescribed under sub-section (4) of Section16. The
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right of a registered person to take ITC under sub-
section (1) of Section 16 of the Act becomes a
vested right only if the conditions to take it are
fulfilled, free of restrictions prescribed under sub-
section (2) thereof. In order to invoke Article 300-A
of the
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Constitution by a person, two circumstances must

jointly exist :-
(i) Deprivation of property of a person
(ii) Without sanction of law
27. We have briefly dealt with what the expression
'property' connotes as explained in case of Jilubhai
Nanbhai Khachar (supra), paragraph 42 of which
reads thus :-
"42. Property in legal sense means an aggregate of
rights which are guaranteed and protected by law.
It extends to every species of valuable right and
interest, more particularly, ownership and exclusive
right to a thing, the right to dispose of the thing in
every legal way, to possess it, to use it, and to
exclude everyone else from interfering with it. The
dominion or indefinite right of use or disposition
which one may lawfully exercise over particular
things or subjects is called property. The exclusive
right of possessing, enjoying, and disposing of a
thing is property in legal parameters. Therefore, the
word 'property' connotes everything which is
subject of ownership, corporeal or incorporeal,
tangible or intangible, visible or invisible, real or
personal; everything that has an exchangeable value
or which goes to make up wealth or estate or status.
Property, therefore, within the constitutional
protection, denotes group of rights inhering
citizen's relation to physical thing, as right to
possess, use and dispose of it in accordance with
law. In Ramanatha Aiyar's The Law Lexicon, Reprint
Edn., 1987, at p. 1031, it is stated that the property
is the most comprehensive of all terms which can
be used, inasmuch as it is indicative and descriptive
of every possible interest which the party can have.
The term property has a most extensive
signification, and, according to its legal definition,
consists in free use, enjoyment, and disposition by a
person of all his acquisitions, without any control or
diminution, save only by the laws of the land. In
Dwarkadas Shrinivas case [1950 SCC 833 : 1950
SCR 869 : AIR 1951 SC 41] this
Court gave extended meaning to the word property. Mines,
minerals and quarries are property attracting Article 300-A.
28. Upon close reading of sub-section (1) of
Section 16 of the CGST/ BGST Act, we are of the
view that the provision under sub-section (4) of
Section 16 is one of the conditions which makes a
registered person entitled to take ITC and by no
means sub-section (4) can be said to be violative of
Article 300-A of the Constitution of India.
29. We are not convinced with the submissions
advanced on behalf of the petitioners to read down
the provision of sub- section (4) of Section 16 of
the CGST/ BGST Act since we see neither any
reason nor a necessity to do it. We have mentioned
in the beginning, the situations which may require
reading down a statutory provision. There is always
a presumption of constitutional validity of a
legislation, with the burden of showing the contrary,
lying heavily upon someone who challenges its
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validity.
30. Submissions have been advanced on behalf of
the petitioners that sub-section (4) of Section 16
imposes unreasonable and disproportionate
restriction on the right to freedom of trade and
profession guaranteed under Article 19(1)(g) of the
Constitution and is, therefore, violative of
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Article 302 of the Constitution and is in teeth of

Article 13 of the Constitution. This argument is
founded on the ground of absence of any rationale
behind fixation of a cut-off-date for filing of return.
We do not find any merit in the submissions so
advanced, which deserves to be outrightly rejected.”
94. Another Division Bench of Patna High Court in
Aastha Enterprises v. State of Bihar &
others [MANU/BH/1034/2023] has held that
Section 16(2)(c) is constitutionally valid. The claim of the
ITC would be admissible only if the supplier pays the tax.
It has been said that in the concession, there is no
question of double taxation. The seller and the purchaser
have an independent contract without the jurisdiction
of the Government, and if the seller dealer fails to remit
the tax collected from the purchaser dealer to the
Government, the purchaser dealer would have an
independent right to recover from the supplier. The
Government can also finally recover from the seller dealer
the amount unpaid by him after collecting from the
purchaser dealer.
Paragraphs 11 to 14 of the said judgment have been

held as
under:
“11. It is true that Input Tax Credit is a concept

introduced in the tax regime, all over the country for the
purpose of avoiding the cascading effect of taxes. The
benefit of such credit being availed by a purchasing
dealer who sells or manufactures goods, using raw
materials on which tax has been paid is a benefit or
concession conferred under the statute as has been held
in ALD. Automobile Private Limited. Necessarily, the
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conditions for such availment of credit has to be
scrupulously followed failing which there can be no
benefit conferred on the assessee. The benefit is one
conferred by the statute and if the conditions prescribed
in the statute are not complied; no benefit flows to the
claimant.
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12. The contention of double taxation does not impress

us especially since the claim is denied only when the
supplier who collected tax from the purchaser fails to pay
it to the Government. Taxation as has been held is a
compulsory extraction made for the purpose of public
good, by the welfare State and without the levy being
paid to the Government; there can be no claim raised of
the liability to tax having been satisfied and hence there
is no question of double taxation.
13. The further contention raised by the assessee is also
one of the statute having provided measures to recover
the collected tax, which the selling dealer fails to pay to
the Government. The mere fact that there is a mode of
recovery provided under the statute would not absolve
the liability of the tax payer to satisfy the entire liability
to the Government. The purchasing dealer being the
person who claims Input Tax Credit could only claim the
Input Tax benefit if the supplier who collected the tax
from the purchaser has paid it to the Government and
not otherwise. The Government definitely could use its
machinery to recover the amounts from the selling
dealer and if such amounts are recovered at a later point
of time, the purchasing dealer who paid the tax to its
supplier could possibly seek for refund. However, as
long as the tax paid by the purchaser to the supplier, is
not paid up to the Government by the supplier; the
purchaser cannot raise a claim of Input Tax Credit
under the statute. We have to notice that the word
‘Input Tax Credit’ itself postulates a situation where the
purchasing dealer has a credit in the ledger account
maintained by it with the Government. The said credit
can only arise when the supplier pays up the tax
collected from the purchaser. The mere production of a
tax invoice, establishment of the movement of goods and
receipt of the same and the consideration having been
paid through bank accounts would not enable the Input
Tax Credit; unless the credit is available in the ledger
account of the purchasing dealer who is an assessee.
14. The seller and purchaser have an independent contract
without the junction of the Government. The statute
provides for a levy of tax on goods and services or both,
supplied by one to the other which can be collected but
the dealer who collects it has also the obligation to pay
it up to the State. The statutory levy and the further
benefit of Input Tax Credit conferred on the purchasing
dealer depends not only upon the collection by the seller
but also the due payment by the seller to the
Government. When the supplier fails to comply with the
statutory requirement, the purchasing dealer cannot,
without credit in his account claim Input Tax Credit and
the remedy available to the purchasing dealer is only to
proceed for recovery against the seller. Even if such
recovery from the supplier is effected by the purchasing
dealer; the State would be able to recover the tax
amount collected and not paid to the exchequer, from the
selling dealer since the rigor of the provisions for
recovery on failure to pay up, after collecting tax,
enables the Government so to do.”
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95. The Supreme Court in the case of Mahalaxmi
Cotton Ginning Pressing and Oil Industries
vs. The State of

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Maharashtra and others [MANU/MH/0620/2012], while
interpreting Section 48(5) of Maharashtra Value Added
Tax Act, 2002, and upholding its constitutionality held
that set off is impermissible without any tax being
received into the Government treasury. It has been held
that set off would be available where the tax has been
deposited in the treasury and to that extent, the
entitlement to set-off is created by the statute, in terms
of which the set-off is granted under the legislation must
be strictly observed.
96. Subsection 48 of the Maharashtra Value Added
Tax Act, 2002 would read as under:
“48. Set-off, refund, etc.:-

(1) The State Government may, by rules, provide that,-
(a) in such circumstances and subject to such
conditions and restrictions as may be specified
in the rules, a set-off or refund of the whole or
any part of the tax,-
(i) paid under any earlier law in respect of any
earlier sales or purchases of goods treated as
capital assets on the day immediately
preceding the appointed day or of goods
which are held in stock on the appointed day
by a person who is a dealer liable to pay tax
under this Act, be granted to such dealer;or.
(ii) paid in respect of any earlier sale or
purchase of goods under this Act be granted to
the purchasing dealer; or
(iii)paid under the Maharashtra Tax on Entry of
Motor Vehicles into the Local Areas Act, 1987
(Mah. XLII of 1987) be granted to the dealer
purchasing or importing motor vehicles; or
(iv) paid under the Maharashtra Tax on Entry
of Goods into the Local Areas Act, 2002, be
granted to the dealer;
(b) for the purpose of the levy of tax under any
of the provisions of this Act, the sale price may
in the case of any class of sales be reduced to
such extent, and in such manner, as may be
specified in the rules.
(2)No set-off or refund as provided by any rules
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made under this Act shall be granted to any
dealer in respect of any purchase made from
a registered dealer after the appointed day,
unless the claimant
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dealer produces a tax invoice, containing a

certificate that the registration certificate of
the selling dealer was in force on the date of
sale by him and the due tax, if any, payable
on the sale has been paid or shall be paid and
unless such certificate is signed by the selling
dealer or a person duly authorised by him.
(3) Subject to the provisions contained in
subsection (4), where no tax has been charged
separately under any earlier law, the rate of
tax applicable for the purposes of calculating
the amounts of set off, or refund in respect of
any earlier sale or purchase of goods, or for
the purposes of reduction of sale or purchase
price for levy of tax, shall be the rate setout
against the goods in the relevant Schedule
under any earlier law.
(4)Where, under any notification issued under
this Act or as the case may be, any earlier law,
any sale or purchase of goods has been
exempted from the payment of whole of sales
tax or purchase tax, then, for the purposes of
sub-section (3), the rate of tax applicable shall
be nil; and where it is exempted from payment
of any part of sales tax (or purchase tax), the
rate of tax applicable shall be the rate at which
the payment of tax is to be made by virtue of
such exemption.
(5)For the removal of doubt it is hereby
declared that, in no case the amount of set-off
or refund on any purchase of goods shall
exceed the amount of tax in respect of the
same goods, actually paid, if any, under this
Act or any earlier law, into the Government
treasury except to the extent where purchase
tax is payable by the claimant dealer on the
purchase of the said goods effected by him :
Provided that, where tax levied or leviable
under this Act or any earlier law is deferred or
is deferrable under any Package Scheme of
Incentives implemented by the State
Government, then the tax shall be deemed to
have been received in the Government
Treasury for the purposes of this sub- section.
(6)Where at any time after the appointed day, a
dealer becomes entitled to a refund whether
under any earlier law or under this Act, then
such refund shall first be applied against the
amount payable, if any, under any earlier law
or this Act and the balance amount, if any,
shall be refunded to the dealer.”
97. Paragraph 38 of the judgment of Mahalaxmi
Cotton Ginning Pressing (supra) is extracted hereunder: -
38. Section 48(5) uses the expression "actually

paid" into the Government treasury. The words
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"actually paid" must receive their ordinary and
natural meaning. A set off under Section
48(5) would be
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allowable only to the extent of the tax, if any,

that has been actually paid into the treasury in
respect of the purchase tax paid on the same
goods. The use of the word "actually" in
conjunction with the word "paid" leaves no
manner of doubt about the legislative intent.
A set off is available where tax has been
deposited in the treasury and to the extent of the
tax deposited. Where no tax has been deposited
in the treasury, there is no tax actually paid in
respect of which a set off can be granted. In
State of Madhya Pradesh vs. Indore Iron and
Steel Mills Pvt. Ltd.,18 MANU/SC/0637/1998:
AIR 1998 SC 3050 the
Supreme Court considered the provisions of a
notification issued under the Madhya Pradesh
General Sales Tax Act, 1958 which contained a
condition that the goods "had suffered entry
tax"under a particular enactment before they
were purchased by the registered dealer.
Interpreting the words "suffered entry tax",
the Supreme Court held that it is only where
the entry tax had actually been paid that the
exemption would arise:
In our view, the words of the said notification
under the State Sales Tax Act are so clear that
they leave no doubt whatsoever and cannot be
subjected to any construction but one, namely,
that only goods upon which entry tax under
the Entry Tax Act has been paid are entitled to
the exemption thereunder. There has to be
actual payment.The impact of the entry tax
upon the goods for which the exemption is
sought has to be felt; only then is the
exemption available. The use of the word
"suffered" makes this plain.
There is no reason for the Court to depart from
the plain and ordinary meaning of the words
"actually paid", when used in the context of
Section 48(5).
98. In Willowood Chemicals vs. Union of India [2018
(58) GSTR 310 (Guj)], in Paragraphs 30 and 35, it has been
held that conditions restrictions and time limit are crucial
for granting ITC and collection of tax of each financial
year, otherwise, it would impact revenue collection,
budgetary allocation and in rem revenue deficite.
[Paragraphs 30 and 35 of the said judgment are extracted

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in paragraph 79 of this judgment.]
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Conclusion:
99. The Government had realized the difficulty in the
initial roll out of the GST regime under the CGST/SGST
Act and considered that GSTR 2A was not available initially
in the Finance years, 2017-2018 and 2018-2019, during
the implimentation of GST. In order to resolve all bona
fide claims and mistakes, Circular No.183/15/2022- GST
dated 27.12.2022 and Circular No. 193/05/2023- GST
dated 17.07.2023 have been issued. Circulars cover the
period from the introduction of GST till Section 16(2)(aa)
was introduced with effect from 01.01.2022. The ITC can
be availed by the recipient for the bona fide scenarios listed in
those Circulars on submitting proof of payment to the
Government by the supplier. Therefore, if, during the
pendency of these writ petitions, the petitioners who could
have got the benefits of these Circulars and could not avail
the benefits within the time limit prescribed, may approach
the appropriate GST authority within a period of thirty days
from today to avail the benefit of the aforesaid
Circulars, if the same is/are applicable to their case. The
GST authorities will examine the claim of the individual
dealer by applying the provisions of the Circulars, and it
will grant applicable relief to eligible dealers.

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100. Prior to the amendment in Section 39 by the
Finance
Act 2022, the date for furnishing the return under Section 39
was
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30th September. Considering the difficulties in the initial
stage of the implementation of the GST regime, its
understanding, and compliance, the Legislature effected
the amendment and extended the time for filing the
return for September to 30th November in each
succeeding Financial Year. The amendment is only
procedural to ease the difficulties initially faced by the
dealers / taxpayers. Therefore, where for the period from
01.07.2017 till 30.11.2022, if a dealer has filed the return
after 30th September and the claim for ITC was made
before 30th November, the claim for ITC of such dealer
should also be processed if he is otherwise entitled to
claim the ITC. It has been pointed out in several cases
which are pending before this Court that the claim was
made before 30th November of the succeeding Financial
Year, but the relevant period was 20th October, which was
the extended date for furnishing the return under
Section 39 for the month of September. Therefore, if a
person has furnished the return for the month of
September till 30th November, their claim should also be
considered and processed and should not be rejected if
the dealer did not furnish the return for the month of
September on or before 20th October. This amendment

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being procedural has to be given retrospective effect and,
therefore, it is provided that it should be treated that the
time limit for furnishing the return for the month of
September is 30th November in each Financial Year with
effect
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from 01.07.2017, considering the peculiar nature of
difficulties in the initial period of implementation of the
GST regime. So far as the challenge to the constitutional
validity of Section 16(2)(c) and Section 16(4) is
concerned, the same is rejected.
Result:
101. The liberty is granted to the petitioners, who can
claim the benefit of the two Circulars, namely, Circular
No. 183/15/2022- GST dated 27.12.2022 and Circular
No. 193/05/2023- GST dated 17.07.2023 to make their
claim within one month from today before the
appropriate authority who shall examine the claim of
the individual dealer and process the claim.
101.1 The time limit for furnishing the return for
the month of September is to be treated as 30 th
November in each financial year with effect from
01.07.2017, in respect of the petitioners who had filed
their returns for the month of September on or before
30th November, and their claim for ITC should be
processed, if they are otherwise eligible for ITC.
The writ petitions are hereby disposed of. All
Interlocutory Applications as regards interim matters
stand closed.
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Sd/-
DINESH KUMAR SINGH

JUDGE
SJ
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APPENDIX OF WP(C) 31559/2019
PETITIONER EXHIBITS
EXHIBIT P1 COPY OF NOTIFICATION NO.49/2019 ISSUED BY
THE 1ST RESPONDENT DATED 09.10.2019.
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PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE FORM GSTR 3B FROM JULY,
2017 TO MARCH, 2018 FOR GSTIN
32AADFP6131E1ZR.
EXHIBIT P2 TRUE COPY OF THE FORM GSTR 9 FOR 2017-18
FOR GSTIN 32AADFP3161E1ZR.
EXHIBIT P3 TRUE COPY OF THE NOTICE DATED 8.7.2020 IN
FORM GST ASMT 10 FOR 2017-18 FOR GSTIN
32AADFP6131E1ZR.
EXHIBIT P4 TRUE COPY OF THE REPLY DATED 27.07.2020
IN FORM GST ASMT 11 FOR 2017-18 FOR GSTIN
32AADFP6131E1ZR.
IN FORM GST DRC-01A FOR 2017-18 FOR GSTIN
32AADFP6131E1ZR.
EXHIBIT P6 TRUE COPY OF THE GSTR 2A FOR 2017-18 FOR
GSTIN 32AADFP6131E1ZR.
EXHIBIT P7 TRUE COPY OF THE PURCHASE LEDGER OF ANNA
PLASTICS FOR 2017-18 WITH RELEVANT
INVOICES.
EXHIBIT P8 TRUE COPY OF THE LEDGE ACCOUNT OF THE 9TH
RESPONDENT WITH THE PETITIONER.
EXHIBIT P9 TRUE COPY OF THE DETAILS OF 9TH
RESPONDENT WITH GSTIN 32AFCPJ0127N1ZS IN
GST NETWORK.
EXHIBIT P10 TRUE COPY OF THE RELEVANT PROVISIONS OF
SECTION 16 IN CENTRAL GOODS AND SERVICE
TAX ACT, 2017.
EXHIBIT P11 TRUE COPY OF THE CIRCULAR NO.F.NO.CBEC-
20/06/14/2019-GST DATED 11.11.2019 ISSUED
BY THE GOVERNMENT OF INDIA.
EXHIBIT P12 TRUE COPY OF THE NOTIFICATION NO.49/2019-
CENTAL TAX DATED 09.10.2019 ISSUED BY THE
GOVERNMENT OF INDIA.
EXHIBIT P13 TRUE COPY OF THE INTERIM ORDER IN WPC NO.
31559 OF 2019 DATED 14-10-2022
EXHIBIT P14 TRUE COPY OF THE NOTICE DATED 22-06-2023
ISSUED BY THE 3RD RESPONDENT TO THE
PETITIONER
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PETITIONER EXHIBITS
EXHIBIT P1 THE TRUE COPY OF DISTRIBUTION AGREEMENT
DATED 31.1.2018, ENTERED INTO BETWEEN
PETITIONER AND FIRST RESPONDENT
EXHIBIT P2 THE TRUE COPY OF REGISTRATION CERTIFICATE
DATED 18.7.2018 OF THE FIRST RESPONDENT
EXHIBIT P3 THE TRUE COPY OF SHOW CAUSE NOTICE NO
32AAICM8997RIZA/2018-18 DATED 6.7.2021
ISSUED BY STATE TAX OFFICER FIRST CIRCLE
STATE GOODS AND SERVICE TAX DEPARTMENT
KOZHIKODE
EXHIBIT P4 THE TRUE COPY OF RECEIPT OF COMPLAINT
DATED 20.10.2021, FILED BY THE PETITIONER
AGAINST THE FIRST RESPONDENT
EXHIBIT P5 THE TRUE COPY OF NOTIFICATION NO 49/2019-
CENTRAL TAX DATED 9.10.2019 ISSUED BY
GOVERNMENT OF INDIA, MINISTRY OF FINANCED
CENTRAL BOARD OF INDIRECT TAXES AND
CUSTOMS
EXHIBIT P6 THE TRUE COPY OF NOTIFICATION NO 75/2019-
CENTRAL TAX DATED DATED 26.12.2019 ISSUED
BY GOVERNMENT OF INDIA, MINISTRY OF
FINANCE, CENTRAL BOARD OF INDIRECT TAXES
AND CUSTOMS
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PETITIONER EXHIBITS
EXHIBIT P1 A TRUE COPY OF THE NOTICE IN FORM GST
ASMT -10 DATED 30.07.2020.
EXHIBIT P2 A TRUE COPY OF THE REPLY FILED BY THE
PETITIONER DATED 20.07.2021.
EXHIBIT P3 A TRUE COPY OF THE ASSESSMENT ORDER U/S.
73 DATED 01.02.2022.
EXHIBIT P3(A) A TRUE COPY OF THE PROCEEDINGS OF
ASSESSMENT DATED 31.1.2021.
EXHIBIT P3(B) A TRUE COPY OF THE NOTICE OF DEMAND IN
FORM GST DRC - 07.
ANNEXURE A A COPY OF JUDGMENT IN THE STATE OF
KARNATAKA VS. M/S. ECOM GILL COFFEE
TRADING PRIVATE LIMITED (2023 (3) TMI 533
SC)
ANNEXURE B A COPY OF JUDGMENT IN SUNCRAFT ENERGY [P]
LTD AND ANR VS. THE ASSISTANT
COMMISSIONER, STATE TAX, BALLYGUNGE
CHARGE AND OTHERS (MAT 1218 OF 2023
DATED: 02.08.2023)
ANNEXURE C A COPY OF JUDGMENT IN COMMISSIONER OF
CENTRAL EXCISE, JALANDHAR VS. KAY KAY
INDUSTRIES, (2013 (8) TMI 772 - SC)
ANNEXURE D A COPY OF JUDGMENT IN ARISE INDIA LTD.
VS. COMMISSIONER OF TRADE AND TAXES [TS-
314-HC2017(DEL)-VAT],
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PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF GSTR 3B MONTHLY ONLINE
RETURNS SUBMITTED FOR THE PERIOD APRIL
2021 TO SEPTEMBER 2021.
EXHIBIT P2 TRUE COPY OF NOTICE IN GST ASMT-10 DATED
24/12/2021 ISSUED TO PETITIONER BY 4TH
RESPONDENT.
EXHIBIT P3 TRUE COPY OF REPLY DATED 27/12/2021
SUBMITTED BEFORE 1ST RESPONDENT AGAINST
EXT.P2 NOTICE.
EXHIBIT P3A TRUE COPY OF LETTER DATED 22/02/2022
SUBMITTED BEFORE 4TH RESPONDENT ALONG
WITH E-MAIL RECEIVED FROM CUSTOMS
DEPARTMENT.
EXHIBIT P4 TRUE COPY OF INTIMATION IN FORM GST DRC-
01A DATED 16/05/2022 ISSUED BY 4TH
RESPONDENT, ALLEGING EXCESS INPUT TAX
CREDIT AVAILED BY PETITIONER BY SCRUTINY
OF GSTR 3B RETURN WITH GSTR 2A FOR THE
PERIOD APRIL TO SEPT. 2021.
EXHIBIT P5 TRUE COPY OF REPLY DATED 24/06/2022
SUBMITTED BEFORE 4TH RESPONDENT AGAINST
EXT.P4 INTIMATION, ALONG WITH SUPPORTING
DOCUMENTS.
EXHIBIT P6 TRUE COPY OF THE PRESS RELEASE DATED
04/05/2018 ISSUED BY THE CBIC.
EXHIBIT P7 TRUE COPY OF THE PRESS RELEASE DATED
18/10/2018 ISSUED BY THE CBIC.
EXHIBIT P8 TRUE COPY OF THE CIRCULAR BEARING
NO.123/42/2019-GST DATED 11/11/2019
ISSUED BY THE MINISTRY OF FINANCE,
GOVERNMENT OF INDIA.
EXHIBIT P9 TRUE COPY OF THE JUDGMENT OF THE HON'BLE
MADRAS HIGH COURT IN WP(MD) 2127/2021
(M/S.D.Y. BEATHEL ENTERPRISES VERSUS THE
STATE TAX OFFICER (DATA CELL),
(INVESTIGATION WING) COMMERCIAL TAX
BUILDINGS, TIRUNEVELI).
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PETITIONER EXHIBITS
EXHIBIT P1 COPY OF FORM GSTR 3B DATED 07-02-2020
FILED BY THE PETITIONER FOR THE MONTH
DECEMBER, 2018
EXHIBIT P1(A) COPY OF FORM GSTR 3B DATED 07-02-2020
JANUARY, 2019
EXHIBIT P1(B) COPY OF FORM GSTR 3B DATED 07-02-2020
FEBRUARY, 2019
EXHIBIT P1(C) COPY OF FORM GSTR 3B DATED 28-02-2020
MARCH, 2019
EXHIBIT P2 COPY OF THE NOTIFICATION NO. 52/2020-
CENTRAL TAX DATED 24-06-2020 ISSUED BY
THE 2ND RESPONDENT
THE 2ND RESPONDENT
THE 2ND RESPONDENT
EXHIBIT P5 COPY OF NOTICE IN FORM DRC-01A DATED 19-
07-2022 ISSUED BY THE 1ST RESPONDENT
EXHIBIT P6 COPY OF THE INTERIM ORDER IN WP(C) NO.
10824/2022 DATED 29-03-2022 PASSED BY THE
HON'BLE HIGH COURT OF KERALA
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PETITIONER EXHIBITS
EXHIBIT- P1 TRUE COPY OF THE NOTICE FORM GST ASMT-10
DATED 29/6/2020 ISSUED U/S 61 OF THE
ACT,2017 BY THE 4TH RESPONDENT
EXHIBI - P2 TRUE COPY OF THE SHOW CAUSE NOTICE
32AACFJ5865CDIZN/2017-18 DATED 28/6/2021
IN GST DRC -01 ISSUED BY THE 4TH
RESPONDENT
EXHIBIT- P3 TRUE COPY OF THE REPLY DATED 27/11/2021
SUBMITTED BY THE PETITIONER THROUGH THE
ONLINE PORTAL
EXHIBIT- P4 TRUE COPY OF THE ORDER U/S/ 73 DATED
1/6/2022 ALONG WITH FORM GST DRC -07
ISSUED BY THE 4TH RESPONDENT
EXHIBIT -P5 TRUE COPY OF THE CIRCULAR BEARING NO.
123/42/2019- GST DATED 11/11/2019 ISSUED
BY THE MINISTRY OF FINANCE, GOVERNMENT OF
INDIA
EXHIBIT- P6 TRUE COPY OF CIRCULAR NO. 122/41/2019-GST
DATED 5/11/2019 ISSUED BY THE CENTRAL
BOARD OF DIRECT TAXES AND CUSTOMS.
EXHIBIT-P7 TRUE COPY THE CIRCULAR NO. 8/2020 DATED
4/8/2020 ISSUED BY COMMISSIONER OF STATE
TAX
EXHIBIT -P8 TRUE COPY OF THE JUDGMENT OF THE
HONOURABLE MADRAS HIGH COURT IN W.P.(MD)
2127/2019 (M/S D. Y. BEATHEL ENTERPRISES
VERSUS THE STATE TAX OFFICER , ( DATA
CELL), (INVESTIGATION WING) COMMERCIAL
TAX BUILDING,TIRUNELVELI). DATED
24/2/2021
EXHIBIT -P9 TRUE COPY OF THE PRESS RELEASE DATED
4/5/2018 ISSUED BY THE CBIC
EXHIBIT- P10 TRUE COPY OF THE PRESS RELEASE DATED
18/10/ 2018 ISSUED BY THE CBIC
EXHIBIT- P11 TRUE COPY OF THE INTERIM ORDER IN W.P.C.
NO. 15802/2022 OF THE HONOURABLE HIGH
COURT OF KERALA DATED 13/5/2022
W.P(C) Nos. 31559/2019, 25891/2020, 26515/2021,5995/2022, 2024:KER:37752
21545/2022, 27854/2022, 24327/2022, 36612/2022, 24677/2023,
37039/2023
17
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE ORDER DT.31.12.2021
ISSUED BY 1ST RESPONDENT ,FINANCIAL YEAR
2017-2018 .REF.NO. Z13212210069351
EXHIBIT P2 TRUE COPY OF THE APPELLATE ORDER
DT.29.06.2022 OF THE 2ND RESPONDENT IN
APPEAL NO.GST(ALPY) 66/2022.
W.P(C) Nos. 31559/2019, 25891/2020, 26515/2021,5995/2022, 2024:KER:37752
21545/2022, 27854/2022, 24327/2022, 36612/2022, 24677/2023,
37039/2023
17
PETITIONER EXHIBITS
EXHIBIT 1 TRUE COPY OF THE RECOVERY NOTICE BEARING
NO.AR/GST/ 32AKPPS5038M1ZL/27/2023-24
DATED 16.6.2023 ISSUED BY THE 2ND
RESPONDENT.
EXHIBIT-P2 TRUE COPY OF THE RECOVERY NOTICE BEARING
NO.AR/GST/ 32AKPPS5038M1ZL/28/2023-24
DATED 16.6.2023 ISSUED BY THE 2ND
RESPONDENT.
EXHIBIT-P3 TRUE COPY OF THE ASSESSMENT ORDER
NO.32AKPPS5038M1ZL/2017-18/2022-23 DATED
4.11.2022 ALONG WITH FORM GST DRC 07
DATED 4.11.2022 UPLOADED IN THE GST
PORTAL ISSUED BY THE 1ST RESPONDENT.
EXHIBIT-P6 TRUE COPY OF ORDER DATED 10.11.2022 IN
W.P.(C) 24243/2022 PASSED BY THIS HON'BLE
COURT.
W.P(C) Nos. 31559/2019, 25891/2020, 26515/2021,5995/2022, 2024:KER:37752
21545/2022, 27854/2022, 24327/2022, 36612/2022, 24677/2023,
37039/2023
17
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE SHOW CAUSE NOTICE DATED
13/03/2023 IN DRC 01A
EXHIBIT P3 TRUE COPY OF THE SHOW CAUSE NOTICE DATED
07/08/2023
EXHIBIT P4 TRUE COPY OF THE REPLY DATED 4/09/2023
EXHIBIT P5 THE COPIES OF THE INVOICES ( TAX
INVOICES) OF THE SUPPLIER DULY CHARGING
GST ON THE RENTAL AMOUNTS
EXHIBIT P6 TRUE COPY OF THE STATEMENT SHOWING
DETAILS OF PAYMENTS MADE TO THE SUPPLIER
EXHIBIT P7 TRUE COPY OF THE BANK STATEMENT
EVIDENCING THE PAYMENTS MADE TO THE
SUPPLIER DATED:13/09/2023

Judgment 04062024 KHC 16 2 C and 16 4240607122954 543592

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2024:KER:37752

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

M/S M.TRADE LINKS

SRI. MUHAMED RAFIQ-SPL.GP, SRI.P.R. SREEJITH -SC, GSTN,

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08.11.2023,

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

WP(C) NO. 25891 OF 2020

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

WP(C) NO. 26515 OF 2021

MKHK TECHSTREAM PRIVATE LIMITED

1 INFINITE TECHNOLOGY SOLUTIONS

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

WP(C) NO. 5995 OF 2022

1 THE ASSISTANT COMMISSIONER

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

08.11.2023, ALONG WITH WP(C).31559/2019 AND CONNECTED CASES, THE

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

WP(C) NO. 21545 OF 2022

M/S. ULTRAPRIME CEMENTS INDIA PVT. LTD.,

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

WP(C) NO. 27854 OF 2022

YOHANAN THYPARAMPIL EASOW,

1 STATE TAX OFFICER,

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

WP(C) NO. 24327 OF 2022

P.J. GEORGE( PROPRIETOR)

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

1 STATE TAX OFFICER

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

WP(C) NO. 24677 OF 2023

CHALLIYIL VIJAYAN SHAN

1 ASSISTANT COMMISSIONER (WC & LT)

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

IN THE HIGH COURT OF KERALA AT ERNAKULAM

TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946

M/S. MALL OF JOY PVT LIMITED,

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08.11.2023,

ALONG WITH WP(C).31559/2019 AND CONNECTED CASES, THE COURT ON

04.06.2024 DELIVERED THE FOLLOWING:

In the present batch of writ petitions, challenge has

been made to Sections 16(2)(c) and 16(4) of the Central

Goods and Services Tax Act and State Goods and

Services Act, 2017.

2. It took 13 long years, i.e., 2004-2017, for Goods