D. S. Engineering Works LIP Vs Assistant Commissioner of Commercial Taxes (Audit) (Karnataka High Court)
The petitioner approached the High Court seeking multiple reliefs, including a declaration that Section 16(2)(c) of the CGST/SGST Acts is unconstitutional as being violative of Articles 14 and 19(1)(g) of the Constitution of India. In the alternative, the petitioner sought to read down the phrase “has been actually paid” in Section 16(2)(c) to mean “ought to have been paid.” The petitioner also sought quashing of the adjudication order dated 06.08.2024 for the financial year 2019-20 and requested a direction to grant the benefit of Circular No.183/15/2022-GST dated 27.12.2022.
At the outset, the petitioner’s counsel submitted that the challenge to the constitutional validity of Section 16(2)(c) was not pressed. This submission was taken on record.
The petitioner relied on Circular No.183/15/2022-GST dated 27.12.2022, which provides a mechanism to rectify errors committed in invoices or statutory forms. It was contended that the petitioner was entitled to the benefit of this Circular. Reliance was placed on a decision of a Co-ordinate Bench in W.P. No.16175 of 2022 dated 06.01.2023, wherein the benefit of the said Circular had been extended to the financial year 2019-20 by adopting a justice-oriented approach, even though the Circular expressly referred only to the financial years 2017-18 and 2018-19.
The respondents opposed the petition, contending that Circular No.183/15/2022-GST applies only to financial years 2017-18 and 2018-19, while Circular No.193/05/2023-GST dated 17.07.2023 governs the period from 01.04.2019 to 31.12.2021.
It was not in dispute that the petitioner’s transaction pertained to the financial year 2019-20. The Court referred to the earlier decision, wherein it had held that when identical errors existed across multiple assessment years, the benefit of Circular No.183/15/2022-GST could not be denied merely because the Circular expressly mentioned only earlier years. The Court had directed the revenue authorities to follow the procedure prescribed in the Circular and apply it to the assessment years 2017-18, 2018-19, and 2019-20, adopting a justice-oriented approach.
In the present case, the Court reiterated that where identical errors exist across multiple assessment years, the benefit of Circular No.183/15/2022-GST cannot be denied solely on the ground that it expressly refers to earlier years. The Court also noted that Circular No.193/05/2023-GST dated 17.07.2023 expressly covers the period relevant to the petitioner.
For these reasons, the writ petition was disposed of with directions. Respondent Nos.1 to 3 were directed to take necessary steps in relation to the petitioner for the assessment year 2019-20 in terms of Circular No.183/15/2022-GST dated 27.12.2022 as well as Circular No.193/05/2023-GST dated 17.07.2023. The impugned adjudication order dated 06.08.2024 was set aside. Respondent No.2 was directed to reconsider the matter afresh strictly in accordance with law and in light of the above Circulars.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has approached this Court seeking for the following reliefs.
i. to declare and strike down Section 16 (2) (c) of the CGST/SGST Acts as being unconstitutional, the same being violative of Articles 14 and 19(1)(g) of the Constitution of India.
ii. In the alternative, the Petitioner most respectfully prays that this Hon’ble High Court may be pleased to read down the phraseology “has been actually paid” occurring in Section 16 (2) (c) of the CGST/SGST Acts to mean “ought to have been paid”.
iii. The Petitioner most respectfully prays that this Hon’ble High Court may be pleased to issue a or a direction in the nature of a Writ of Certiorari quashing the impugned Order of adjudication dated 06.08.2024, Bearing No. ACCT(AUDIT)-1/Bly/GST-ADJN/2024-25/T, vide ANNEXURES – “D” passed by Respondent No.2, F. Y. 2019-20, to this writ petition.
iv. Issue a Writ of Mandamus or a direction to give benefit under as per the circular no 183/15/2022-GST Issued By the Respondent no 05. vide ANNEXURE – “E”.
v. This Hon’ble High Court may be pleased to issue such other writ or writs or directions in the nature of a writ as this Hon’ble High Court may deem it fit to grant in the facts and circumstances of the petitioner’s case.
2. At the outset learned counsel appearing for the petitioner submits that, prayer No.1 challenging the constitutional validity of Section 16(2)(c) of the CGST/SGST Acts is not pressed.
3. The said submission is taken on record.
4. Learned counsel for the petitioner draws the attention of this Court to the Circular bearing No.183/15/2022-GST, dated 27.12.2022 (Annexure-F) and contends that the petitioner is entitled to the benefit of the said Circular, which provides a mechanism to rectify error committed in invoices of statutory forms
Reliance is placed on the decision of the Co- ordinate Bench of this Court in M/s Wipro Limited India Vs. The Assistant Commissioner of Central Taxes and Others1 (“Wipro Limited India’ for short), wherein this Court extended the benefit of the said Circular even to the financial year 2019-20 by adopting a justice oriented approach.”
5. Per contra, learned Additional Government Advocate appearing for the respondents/State in support of the statement of objections filed, submits that Circular bearing No.183/15/2022-GST dated 27.12.2022 applies only for financial year 2017-18 and 2018-19, whereas the Circular bearing No. No.193/05/2023-GST dated 17.07.2023 governs the period from 01.04.2019 to 31.12.2021.
6. It is not in dispute that the petitioner’s transaction pertains to the financial year 2019-20. This Court in Wipro Limited India, has held at paragraph Nos.8 and 9 as under:
8. Under these circumstances, I am of the considered opinion that it would be just and proper to dispose of this petition directing the respondents 1 to 3 – revenue to follow the procedure prescribed in the Circular and apply the said Circular to the facts of the instant case of the petitioner, 5th respondent and their transactions for the years 2017-18, 201819 and 2019-20. It is also necessary to state that though the Circular refers only to the years 2017-18 and 2018-19, since there are identical errors committed by the petitioner not only in respect of the assessment years 2017-18 and 2018-19 but also in relation to the assessment year 2019-20 also, I am of the view that by adopting a justice oriented approach, the petitioner would be entitled to the benefit of the Circular for the year 2019-20 also. 13
9. In the result, I pass the following:-
ORDER
(i) Petition is hereby disposed of directing the respondents 1 to 3 to take necessary steps in relation to the petitioner and 5th respondent for the assessment years 2017-18, 2018-19 and 2019-20 in terms of the Circular No. bearing No.183/15/2022-GST dated 27.12.2022. (ii) The respondents 1 to 3 are hereby directed to consider the request made by the petitioner vide letter at Annexure-D dated 06.09.2021 and proceed further in accordance with law and in terms of the Circular dated 27.12.2022 as expeditiously as possible.
7. This Court categorically held that where identical error exist across multiple assessment years the benefit of Circular No.183/15/2022-GST cannot be denied merely on the ground that the Circular expressly refers to earlier years, and the same can be extended to the financial year 2019-20 as well.
8. Further, Circular No.193/05/2023-GST, dated 17.07.2023 now expressly covers the period relevant to the petitioner. For the forgoing reasons, writ petition is disposed of with following directions.
i. Respondent Nos.1 to 3 are directed to take necessary steps in relation to the petitioner for the assessment year 2019-20 by the Circular bearing No.183/15/2022-GST dated 27.12.2022 as well as Circular bearing No.193/05/2023-GST dated 17.07.2023.
ii. The impugned order passed by respondent No.2 at Annexure-D is hereby
iii. Respondent No.2 is directed to reconsider the matter afresh strictly in accordance with law and the Circulars referred to above.
Notes:-
1 W.P.No.16175 of 2022 dated 06.01.2023
