Manappuram Finance Ltd. Vs Union of India & Ors. (Bombay High Court)
Bombay High Court Sets Aside Demand on ISD for Delayed Distribution of ITC under Rule 39(1)(a) of CGST Rules
The Petitioner is a registered taxpayer. It is engaged in financing. It has head office registered as Input Service Distributor (ISD) at Mumbai. A notice was issued alleging that the ISD has not distributed the credit in the same month in terms of Rule 39(1)(a) of the CGST Rules. Demand was confirmed. The same was challenged in Writ Petition. The validity of Rule 39(1)(a) was also challenged on the ground that the same is ultra vires Section 20 of the Act.
The Hon’ble Bombay High Court set aside the order and allowed the petition. It held: (i) similar issue has been decided by the Hon’ble Madras High Court in the case of Reliance Jio Infocomm Ltd. wherein it was held that no lapsing provision; (ii) The Hon’ble Telangana High Court in the case of Birlanu Ltd. held the Rule to be ultra vires; (iii) accordingly; remands the matter back to the Adjudicating Authority to reconsider/revisit the issues; (iv) keeps the challenge to Rule 39(1)(a) open to be considered in appropriate proceedings.
