The petitioners challenge section 16(2)(c) of the CGST Act as ultra vires and unconstitutional.
Section 16(2) of the CGST Act — Input Tax Credit — The petitioners challenged Section 16(2)(c) of the Act as ultra vires and unconstitutional and also challenged separate orders, both dated 16.11.2020, whereby, assessment of an amount was confirmed and the assesse was directed to pay the said tax along with the applicable penalty under Section 73 and interest payable thereon. The counsel for the petitioners, while praying for an interim order, has submitted that though the petitioners had paid tax, the respondent had arbitrarily rejected the ITC on account of mismatch between ITC claimed in Form GSTR-3B vis-å-vis ITC reflecting in Form GSTR-2A on the GST portal. He submits that because of Section 16(2)(c) of the CGST Act, benefit of ITC is denied to the petitioners on account of default of the supplier, over whom the petitioners do not have any control, in paying tax to the Government after having collected the same from the petitioners. It is also submitted that in the Value Added Tax (VAT) regime, similar provision was struck down. The petitioners have filed the appeal before the appellate authority. The respondent counsel submitted that there is fundamental difference between CGST regime and VAT regime, and so an analogy with VAT regime cannot be drawn.
Held that:- The Hon’ble High Court rejected the prayer for interim order and listed both these cases together after 3 (three) weeks.
The petitioners challenge section 16(2)(c) of the CGST Act as ultra vires and unconstitutional.
Section 16(2) of the CGST Act — Input Tax Credit — The petitioners challenged Section 16(2)(c) of the Act as ultra vires and unconstitutional and also challenged separate orders, both dated 16.11.2020, whereby, assessment of an amount was confirmed and the assesse was directed to pay the said tax along with the applicable penalty under Section 73 and interest payable thereon. The counsel for the petitioners, while praying for an interim order, has submitted that though the petitioners had paid tax, the respondent had arbitrarily rejected the ITC on account of mismatch between ITC claimed in Form GSTR-3B vis-å-vis ITC reflecting in Form GSTR-2A on the GST portal. He submits that because of Section 16(2)(c) of the CGST Act, benefit of ITC is denied to the petitioners on account of default of the supplier, over whom the petitioners do not have any control, in paying tax to the Government after having collected the same from the petitioners. It is also submitted that in the Value Added Tax (VAT) regime, similar provision was struck down. The petitioners have filed the appeal before the appellate authority. The respondent counsel submitted that there is fundamental difference between CGST regime and VAT regime, and so an analogy with VAT regime cannot be drawn.
Held that:- The Hon’ble High Court rejected the prayer for interim order and listed both these cases together after 3 (three) weeks.