Jharkhand HC dismisses M/s Rewinder Techno Electricals’ challenge to GST ITC time limit u/s 16(4) and GSTR-3B validity under the amendment to Rule 61(5), citing recommendations from the GST Council. The court held that the petitioner should seek remedy through appropriate legal forums based on the Council’s guidance

The High Court of Jharkhand has dismissed the petition challenging the provisions of the Central Goods and Services Tax (CGST) Act, 2017 in light of the 53rd GST Council Meeting’s recommendations. The court dismissed the writ petition filed by M/s Rewinder Techno Electricals, a partnership firm based in Dumka, Jharkhand challenging Section 16(4) and amendment to Rule 61(5) of the CGST Act, 2017, on grounds of ultra vires. The petitioner had sought to declare Section 16(4) of the CGST Act and the amendment to Rule 61(5) of the Central Goods and Services Tax Rules, 2017, as unconstitutional. The petitioner, represented by Amrita Sinha and Madhavi Nikunj Horo, contended that Section 16(4) of the CGST Act, which imposes a time limit for availing Input Tax Credit (ITC), violated fundamental rights guaranteed under Articles 14, 19(1)(g), and 300A of the Indian Constitution. It was argued that the limitation imposed by this section interfered with their vested right to claim ITC. Get a Copy of GST Manual (Acts & Rules), Click here The petitioner also challenged the amendment to Rule 61(5) introduced via Notification 49/2019-CT dated October 9, 2019. This amendment retrospectively validated GSTR-3B as a valid return under Section 39 of the CGST Act, 2017, effective from July 1, 2017. The petitioner argued that this amendment was unconstitutional as it retrospectively altered the legal framework governing tax returns and impacted their right to avail ITC. The respondent revenue, Union of India through the Principal Commissioner, Central Goods and Services Taxes and Central Excise, Ranchi and others, represented by Mr. Parth S.A. Swaroop Pati, Mr. Anurag Vijay, Ms. Malsi Pathak and Mr. Om Prakash, contended that Section 16(4) of the CGST Act and the amendment to Rule 61(5) are lawful and valid. It was also argued that the time limit for availing ITC and the retrospective validation of GSTR-3B are consistent with the GST framework and the GST Council’s recommendations. The division bench comprising the Acting Chief Justice Sujit Narayan Prasad and Justice Arun Kumar Rai dismissed the petition, upholding the constitutionality of Section 16(4) and Rule 61(5) of the CGST Act. The court cited the GST Council’s recommendations and confirmed that the provisions and retrospective validation of GSTR 3B to be a valid return under Section 39 of the CGST Act, 2017 were lawful, advising the petitioner to pursue any unresolved issues through proper legal channels. Get a Copy of GST Manual (Acts & Rules), Click here The decision came after noting that the GST Council, in its 53rd meeting held on June 22, 2024, had considered the issues raised in the petition. The GST Council’s recommendations were pivotal in the court’s decision to dismiss the petition. The court acknowledged the Council’s guidance and stated that any remaining issues could be pursued through the appropriate legal forums. The judgment effectively upholds the provisions of Section 16(4) and the retrospective validation of GSTR-3B under Rule 61(5). By dismissing the challenge, the court highlighted the recommendations set by the GST Council and maintains the statutory deadlines and procedural requirements for claiming ITC. The petitioner was advised to address any unresolved matters through proper legal channels as per the Council’s recommendations. The judgment emphasised the role of the GST Council in shaping tax policy and the judiciary’s reliance on Council recommendations in resolving legal disputes concerning tax regulations.