High Tech Ecogreen Contractors LLP Vs Joint Director (Gauhati High court)
Gauhati High Court held that sub-rule (4) of Rule 36 of the Central Goods and Services Tax Rules [CGST Rules] is constitutionally valid. Thus, writ challenging validity of the same is liable to be dismissed as being devoid of any merits.
Facts- The petitioner is a registered assessee under the CGST Act and Assam Goods and Service Tax Act, 2017 engaged in the business of rendering works contract service.
A show-cause notice dated 23.12.2021 was issued to the petitioner mainly alleging wrong availment of Input Tax Credit (ITC) which is not allowable under the provision of Rule 36(4) of the CGST Rules. The respondent No.2, Additional Commissioner has passed an order dated 31.03.2023 demanding GST and imposing penalty, the details of which have already been noted in the earlier part of this judgment. Commissioner (Appeals) dismissed the appeal as being barred by limitation.
Thus, vide the present petition, the petitioner has challenged the constitutional validity of Rule 36(4) of the Central Goods and Services Tax/Assam Goods and Services Tax Rules, 2017.
Conclusion- Held that Rule 36 of CGST Rules and in particular sub-Rule (4) of Rule 36 derives power from Section 16 of the CGST Act as well as from the general powers conferred by the CGST Act. 31. Another simple reason for not accepting the contention of the learned counsel for the petitioner that sub-rule (4) of Rule 36 derives power from subsection (4) of Section 43A is that since Section 43A has not been enforced at any point of time till its omission vide Finance Act, 2022, with effect from 01.10.2022, it is impossible to conclude that a rule or sub-rule derives power from a provision which has never been enforced. In view of above discussions, we do not find any merit in the challenge of the petitioner to the validity of sub-rule (4) of Rule 36 of CGST Rules. Hence, the writ petition is dismissed, being devoid of any merit.
