Calcutta HC Refuses to Strike Down Section 16(2)(c): Orders Fresh Hearing on Supplier Cancellation Cases

The writ petitioners (State) or the respondents sought a larger relief in a writ of declaration to declare Section 16(2)(c) of the CGST/WBGST Act as unconstitutional. The petitioner also sought the court to hold the provisions to be constitutional, to read over the provision to deny ITC only in cases of proven collusion or sham transactions. The writ petitioners also requested the court to quash the memos dated 28.08.2019 and 11.11.2019.

The appellant’s learned government counsel argued that the writ petitions were premature and the similar writ petitions challenging the same provisions were still pending before the learned single Judge.

As per the learned counsel of the respondents/writ petitioners, the other writ petitioners are pending due to the fact situation of those cases, and those petitions were disposed of in the impugned order. It was also submitted that the denial of ITC was only based on retrospective cancellation of the supplier’s registration.

The Calcutta High Court observed there is no need to interfere in the order passed by the learned Single Judge. Therefore, the High Court rejected the appeals being MAT 855 of 2022 and MAT 856 of 2022.

The writ petitioners were directed to submit relevant documents within two weeks to the appellate authority. The court ordered the authority to give an opportunity for a personal hearing to the petitioner’s authorised representative, consider all documents and submissions, and conclude proceedings within four weeks of the hearing.