Ram Constructions Vs Union of India (Jharkhand High Court)
Jharkhand High Court, in the case of Ram Constructions Vs Union of India, addressed key issues under the GST regime regarding Input Tax Credit (ITC) for delayed returns for the financial year 2017-18. The petitioner challenged the constitutional validity of Section 16(4) of the Central Goods and Services Tax (CGST) Act, 2017, and Rule 61(5) of the CGST Rules, 2017, as amended through Notification No. 49/2019. These provisions restricted ITC claims to specific time limits and retroactively classified GSTR-3B as a return under Section 39 of the CGST Act. The petitioner argued these restrictions violated Articles 14, 19(1)(g), and 300A of the Indian Constitution by interfering with vested rights to claim ITC.
The court considered the retrospective application of these rules and amendments, concluding that Section 16(5), inserted via the Finance (No. 2) Act, 2024, enabled the petitioner to claim ITC for delayed returns. Consequently, the court directed the tax authorities to permit the ITC claim for FY 2017-18 and ordered the refund of penalties and interest imposed. Additionally, the court mandated a 6% annual interest on the refunded amounts, calculated from the date of collection to the repayment date.
This judgment underscores the importance of balancing compliance requirements with taxpayers’ rights. It highlights the judiciary’s role in ensuring equitable implementation of tax laws while addressing issues of retrospective changes and procedural fairness under the GST framework. The case reaffirms the principle that administrative convenience cannot override constitutional protections.
