The Gujarat High Court has sought replies from the Centre, state government and the Goods and Services Tax Council to a petition challenging the constitutional validity of the Gujarat GST Act, PTI reported on Friday. The plea opposes some restrictions on firms in claiming input tax credit under the new tax system.
Justices Akil Kureshi and BN Karia issued the notices on March 13 and scheduled the next hearing for April 19.
The petition filed by Ahmedabad-based Willowood Chemicals Pvt Ltd challenges the constitutional validity of section 140(3) of the Gujarat GST Act, claiming that it restricts firms from “taking input tax credit on taxes already paid under the [previous] Value-Added Tax Act” if the forms are not submitted on time. The petitioner’s lawyers submitted that the input tax credit already earned under the Gujarat Value Added Tax Act was allowed to be retained and utilised to pay VAT or central sales tax.
The plea also argued that there was no provision under the Gujarat VAT Act or the Central Sales Tax Act “to deny input tax credit in case of failure to furnish statutory declaration”.
The petitioner also claimed that Section 140(1) of the Gujarat GST Act does not adhere to Article 279A of the Indian Constitution, under which the GST Council was established to decide the tax rates.
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