A writ petition has been listed before the Division Bench of the Principal Seat of the Hon’ble Rajasthan High Court at Jodhpur on Tuesday, 29.1.2019. The petition preferred by one Lakhani Metal and Castings Pvt. Ltd of Bikaner challenging the Constitutional validity of the unguided, unfettered and discretionary power of the Central and State Government as provided under Clause ( ii )of proviso of Sub Section 3 of Section 54 of the Central GST Act, 2017 and Rajasthan GST Act, 2017 by effect of which refund of the unutilized input tax credit can be denied to any company without any reasons. In the present matter the refund of Unutilized Input tax credit has been denied to the industry supplying railway parts to the Indian Railways by issuing notification dated 28.06.2017 issued by Central Government and 29.06.2017 by the State Government on the basis of the power coming from the said impugned provision. Advocates Mr. Ramit Mehta and Mr. Saurabh Maheshwari on behalf of the company submitted before the division bench comprising of Hon’ble Mr. Justice Sangeet Lodha and Hon’ble Mr. Justice Dinesh Mehta that the Section 49(6) of the GST Act, 2017 grants statutory right for obtaining refund of the input tax credit after its adjustment of tax, interest, fees and penalty. But by invoking such uncontrolled and  unlimited power coming from The impugned provision i.e. clause (ii) of the proviso to sub section (3) of Section 54 of GST Act 2017 which is under challenge in the writ petition, notifications have been issued by the Central and State Government denying such refund of input tax credit without any judicially tested reasons. It was further submitted that the provision under challenge provides for such powers to the Central and State Government are in clear violation to fundamental rights enshrined under Article 14, 19, 21 and 300A of the Constitution of India.

Moreover such refund of Input tax credit was clearly available without any such provision in the pre GST era i.e. in the Rajasthan VAT act and Central excise Act, it is only after GST introduction from 1.7.2017 such provision has been enacted whereby Government can deny to grant refund of Input tax credit without any reason or foundation.

In the writ petition the petitioner company prayed for striking down of such unconstitutional provision of GST Act as such power is like a wild unbridled horse which is ruining the entire farm. The Division Bench comprising of Justice Lodha and Justice Mehta considered submissions of Mr. Ramit Mehta and Mr. Saurabh Maheshwari to be of substantial and important issue being involved have issued notices to the Central Government and State Government, GST council and have sought their reply after 4 weeks.

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    the closing balance of accumulated credit should have been carried forward automatically and allowed for utilisation for IGST, CGST AND SGST.

  2. Anirudhan says:

    It can also be challenged that 4 Act, 4 Rules, not having any existence for any provision. No software is made uptodate till this time from 01.07.2017. No forms are yet published. So many new forms are introducing. This is instable law. It has to be abolished

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January 2021