Mr. Jagmohan Bansal vs Mr. Bidyut Majumder
2021 Latest Caselaw 754 Tri

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                        HIGH COURT OF TRIPURA
                              AGARTALA
                             WP(C) No.531/2021

For Petitioner(s)                : Mr. Jagmohan Bansal, Sr. Advocate,
                                   Mr. P.K. Ghosh, Advocate,
                                   Mr. Mukul Singla, Advocate.
For Respondent(s)                : Mr. Bidyut Majumder, Asstt. S.G.,

Mr. Paramartha Datta, Advocate.

HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE S.G. CHATTOPADHYAY

Order 09/08/2021 (Akil Kureshi, C.J.)

Petitioner has challenged the vires of Section 16(2)(c) of Central

Goods and Services Tax Act, 2017 as being violative of Articles 14, 19(1)(g)

and 300A of the Constitution of India. This provision provides that a

registered dealer would be eligible for claiming input tax credit on the goods

purchased on the condition that subject to the provisions of Sections 41 and

43A of the Act, the tax charged in respect of such supply has been actually

paid to the Government, either in cash or through utilization of input tax

credit admissible in respect of such supply. The case of the petitioner is that

having paid CGST on the purchases made from a registered dealer, the

petitioner thereafter has no control over the seller to ensure that such tax is

deposited with the Government revenue as is statutorily is his obligation.

Denying to the petitioner input tax credit on such purchases on which the

petitioner has already paid tax on the ground that the selling dealer did not

deposit the tax with the Government revenue would amount to double

taxation.

Learned counsel for the petitioner pointed out that this provision

has been challenged by different dealers before several High Courts in the

country where such challenges are pending after notice or issuance of rule.

Counsel also placed for our consideration various judgments of different High

Courts pertaining to similar provisions contained in other tax statutes prior to

introduction of the GST regime making similar provisions for denial of tax

credit when the selling dealer had failed to deposit the tax with the

Government revenue. He pointed out that the High Courts either read down

the provision as to be applicable only when such non-deposit is with the

connivance of the petitioner or the petitioner is found to be lacking in bona

fides or struck down the provision as being unconstitutional and arbitrary

expecting a dealer to perform an impossible task.

Learned counsel for the petitioner also submitted that according

to the department with respect to certain purchases made by the petitioner

from another registered dealer after paying full taxes the selling dealer has not

deposited the tax with the Government and on account of which the

petitioner's input tax credit account has been put under attachment w.e.f.

21.05.2020. Counsel submitted that as per the provisions of the CGST Act

such attachment cannot continue beyond a period of one year. Such period

being over, in any case the attachment should have been lifted which so far

has not been done.

The issues require consideration. Hence, rule. Since legislation

framed by the Parliament is under challenge, let there be notice to the learned

Attorney General.

Learned Asstt. Solicitor General Mr. Bidyut Majumder waived

notice on behalf of respondent No.1, Union of India, as well as the learned

Attorney General. Learned counsel Mr. Paramartha Datta waived notice on

behalf of respondents No.2 and 3.

For the limited purpose of considering the petitioner's request for

interim relief for removing attachment of the Tax Credit Account, let notice

be returnable on 23.08.2021.

   (S.G. CHATTOPADHYAY), J                        (AKIL KURESHI), CJ




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