The Hon’ble Kerala High Court in the case of Tirupati Balaji Traders v. Union of India [W.P. (Civil) No. 16259 of 2024 dated July 24, 2024] dismissed the writ petition relying on the judgment of M. Trade Links v. Union of India [W.P. (C) NO. 31559 of 2019 dated June 04, 2024].
M/s Tirupati Balaji Traders (“the Petitioner”) contended that if an interpretation is placed on the provisions of Section 16(2)(c) of the Central Goods and Services Tax, 2017 (“the CGST Act”) that would deny Input Tax Credit (“ITC”) to a purchasing dealer who has paid the entire amount of tax to the supplying dealer, the same would render otiose the provisions of Sections 75(12), 76, 79, 82, 83 and 88 of the CGST Act and the Insolvency and Bankruptcy Code, 2016, (“IBC Code”), the right to avail ITC is a conditional right, the Petitioner cannot be given the benefit of ITC unless the amount of tax collected from the Petitioner has actually been paid to the exchequer.
The Petitioner further relied on a Division Bench of this Court in Nahasshukoor v. Asstt. Commissioner [2024] 81 G.S.T.L. 384 [Ker.], where this Court held that the ITC is in the nature of a benefit or concession conferred under the statute. It is up to the purchasing dealer to avail of the said benefit/concession following those conditions.
However, the writ petition failed and was dismissed.
Our Comments:
The Hon’ble Kerala High Court in M/s. M. Trade Links v. Union of India [Supra] has upheld the constitutional validity of Section 16(2)(c) and Section 16(4) of the CGST/SGST Act. After acknowledging the difficulties during the initial implementation years of GST, this Court has relieved the Petitioners by retrospectively extending the time limit to avail ITC to November 30 from the FY 2017-18 onwards.
It must be noted that the vires of Section 16(4) of the CGST Act is currently under challenge in the Hon’ble Supreme Court of India in the case of Shanti Motors v. Union of India [SLP(C) No. 4410 of 2024] alongside other SLPs.
Also, it must be noted that in the case of Thirumalakonda Plywoods v. Assistant Commissioner [W.P. No. 24235 of 2022 dated July 18, 2023], the return in FORM GSTR 3B for the period March 2020 was filed on November 27, 2020, and no relief was provided by the Hon’ble Andhra Pradesh High Court.
The relief given in the present writ petition would be infructuous for the purpose of ITC availment for FY 2017-18 wherein the time limit to avail ITC for the FY 2017-18 had been extended vide Order No. 2/2018 dated December 31, 2018, till March 31, 2019, instead of the November 30 of the next FY that has been prescribed in the present ruling at hand.
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