Constitutional Validity of Time Limit on ITC u/s 16(4) of CGST Act Challenged in Supreme Court

Constitutional Validity of Time Limit on Input Tax Credit u/s.16(4) of CGST Act 2017 has been challenged in the Supreme Court

Constitutional Validity of Time Limit on ITC in Challenge: In a significant legal development, the Supreme Court of India has taken up a challenge pertaining to the time constraints imposed on availing Goods and Services Tax (GST) Input Tax Credit (ITC) under Section 16(4) of the Central Goods and Services Tax Act, 2017. The case at hand, Shanti Motors v. Union of India & Ors., raises fundamental questions regarding the constitutional validity of this provision, asserting that it potentially infringes upon several key articles of the Constitution of India, namely Articles 14, 19(1)(g), and 300A.

The essence of the Special Leave Petition (SLP) revolves around contesting the constitutional validity of Section 16(4) of the CGST Act, which imposes a specific time limit for businesses to avail Input Tax Credit (ITC). The petitioner argues that this provision runs counter to the fundamental rights guaranteed by the Constitution, specifically those pertaining to equality before the law (Article 14), the right to practice any profession or carry out any occupation, trade or business (Article 19(1)(g)), and the right to property (Article 300A).

The Supreme Court has acknowledged the gravity of the issue by admitting the Special Leave Petitions and issuing notices to the concerned respondents, thereby signalling the commencement of a comprehensive judicial scrutiny. In addition to admitting the SLPs, the Court has also taken cognizance of the interim reliefs sought by the petitioners.

Shanti Motors, the petitioner in this case, is represented by a highly capable legal team comprising Mr. Sujit Ghosh, a Senior Advocate, Mr. Bimal Jain, Advocate, Ms. Mannat Waraich, Advocate on Record (AOR), Mr. Ajinkya Tiwari, Advocate, and Mr. Keshav Jatwani, Advocate.

The forthcoming hearing scheduled for February 19, 2024, assumes considerable significance as it will provide a platform for a thorough examination of the constitutional implications surrounding the time limit imposed on GST Input Tax Credit. This case has the potential to shape future tax regulations and interpretations, thus attracting widespread attention from businesses, legal experts, and policymakers alike.

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