MOOT PROBLEM

M/s Enhance Construction Pvt. Ltd is a Private Limited Company, incorporated under the
Companies Act, 1956 and its directors are citizens of India. M/s Enhance Construction Pvt.
Ltd is a works contractor, which is primarily engaged in construction of canals, etc. After, the
advent of the GST regime, the Petitioner company was duly registered under the CGST Act,
2017 and was granted GST Identification No. 21AGEFK2385D1Z7.
That M/s Enhance Construction Pvt. Ltd furnished its GSTR-3B return for the months of
November, 2018 and December, 2018 on 4.12.2019 and 19.12.2019 respectively, and for the
months of January, 2019 – March, 2019 on 14/15.7.2020, and utilized ITC (Input Tax Credit)
of total amount of Rs. 14,68,140/- available in the Petitioner’s electronic credit ledger for
discharge of its output tax liability for the said months.
That the Superintendent of Central Goods and Services Tax & Central Excise Range vide its
Intimation Notice dated 27.01.2021 issued in Form GST-DRC-01A informed the Petitioner
that the Petitioner has filed its GSTR-3B return for the months of November, 2018 – March,
2019 after the due date of 21.10.2019, and claimed ITC of Rs. 14,68,140/- in contravention of
Section 16(4) of the CGST Act, 2017. As such, the Petitioner was directed to pay the
aforesaid amount of Rs. 14,68,140/- along with applicable interest, failing which, it was
stated that proceedings under Section 74 of the CGST Act, 2017 would be initiated against
the Petitioner. That M/s Enhance Construction Pvt. Ltd replied to the aforesaid Notice vide
Letter dated 26.2.2021, and stated that availment of ITC for the months of November, 2018 –
March, 2019 is as per the scheme of the CGST Act, 2017, and denial of the same would inter
alia be violative of both the objects and purpose of the CGST Act, 2017 as well as the rights
guaranteed under the Constitution. As such, it was requested that the proceedings may be
dropped against the Company.
That M/s Enhance Construction Pvt. Ltd filed a writ petition before the Hon’ble Jharkhand
High Court for declaring Section 16(4) of the Central Goods and Services Tax Act, 2017
(Annexure - 4) as ultra vires, in as much as it seeks to impose a time limit for the availment
of Input Tax Credit being violative of Article 14, Article 19(1)(g) and Article 300A of the
Constitution of India and also being violative of the basic structure of the Central Goods and
Services Tax Act, 2017.
Following issues were framed for adjudication: -
(i) Whether Sub-Section 4 of Section 16 which, if interpreted to mean as
prescribing a time limit for the availment of Input Tax Credit, which is
 a substantive right under Section 16(1) & Section 16(2) is ultra vires
the provisions of Central Goods and Services Tax, 2017 (hereinafter
referred to as ‘CGST Act, 2017’)?

(ii) Whether Section 16(2) of the CGST Act, 2017, has an overriding effect
over Section 16(4) of the Act, and therefore upon compliance of the
conditions under Section 16(2), the Petitioner cannot be denied the right
to avail Input Tax credit (hereinafter referred to as ‘ITC’) because of a
mere delay in furnishing the return through Form GSTR-3B?

(iii) Whether once ITC has accrued to the recipient upon fulfillments of
conditions stipulated under Section 16(2) of the CGST Act, 2017, the
same can be denied by the Respondent Authorities in violation of Article
300A of the Constitution of India?

(iv) Whether availment of ITC can be denied to the Petitioner even, if it is

duly reflected in the auto populated form GSTR-2A of the Petitioner?

(v) Whether Section 47 of the CGST Act, 2017 which provides for levy of
late fees on account of furnishing inter alia the return under Section 39
belatedly, has to be read in consonance with Section 16(4) of the Act?

(vi) Whether the Petitioner can be penalized manifold times and be

subjected to double jeopardy for the sole reason of furnishing the
GSTR-3B return belatedly, by first subjecting it to late fees under
Section 47, and consequently denying the benefit of ITC under Section
16(4)?