Page 83 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] NELCO LTD. v. UNION OF INDIA 41
not be straightway made applicable without reference to the language of Section
164 to hold that Rule 117 is ultra vires.
35. The situation regarding input tax credit within GST regime, is also
relevant to note. It is governed by Section 16(4) of the Act. Section 16(4) reads
thus :
“Section 16(4) A registered person shall not be entitled to take input tax
credit in respect of any invoice or debit note for supply of goods or services
or both after the due date of furnishing of the return under section 39 for
the month of September following the end of financial year to which such
invoice or invoice relating to such debit note pertains or furnishing of the
relevant annual return, whichever is earlier.”
Section 16(4) provides that a registered person shall not be entitled to take input
tax credit regarding any invoice or debit note for supply of goods or services af-
ter the due date of furnishing of the return under Section 39 for the month of
September following the end of the financial year to which such invoice or in-
voice relating to such debit note pertains or furnishing of the relevant annual
return, whichever is earlier. [***]. Thus under the GST regime, also input tax
credit is not without time-limit. Prescribing a time-limit under the impugned
Rule is not contrary to the object of the Act.
36. The respondents have, thus, rightly relied on Section 164. The pow-
ers conferred by Section 164(2) are broad and pervasive and take within its
sweep the impugned Rule.
37. The second limb of the petitioner’s argument is that assuming there
is general rule-making power under Section 164(2), it cannot be exercised to take
away substantive rights. This submission is founded on the proposition that
Cenvat credit is a right; the same cannot be taken away. Petitioner contends that
the right to input credit may not be a common law right, but the statute confers it
under Section 140, and the same, thus, cannot be abridged by the executive
through a rule-making power. Relying on the decision of the Supreme Court in
the case of Bharat Barrel, it is contended that where substantive rights are affect-
ed, the power of prescribing limitation is kept by the Legislation to itself. Thus,
substantive rights can be done away only by the Parliament and not by its sub-
ordinates. The Respondents contend that the input tax credit, which is in the na-
ture of exemption, is not a matter of right. Respondents rely on the decisions of
this Court. The Counsel for the parties have cited various decisions on this point;
however, it is not necessary to refer to all as it is a reiteration of the same basic
principle. We have, therefore restricted our discussion of the case laws cited on
those which are closer to the controversy at hand. According to us, two decisions
referred below are most relevant, having construed the very same provision and
the same arguments.
38. The question of input credit tax being a right or otherwise has in the
context of Section 140 has been directly considered by this Court in the case of
JCB India Ltd. [2018 (15) G.S.T.L. 145 (Bom.)] and by the Gujarat High Court in
the case of Willowood. The Division Bench of this Court in the case of JSW Dhar-
matar Port Pvt. Ltd. v. Union of India [2019 (20) G.S.T.L. 721 (Bom.)], in the context
of refund for limitation has followed the decision in Willowood.
39. First, the decision of Gujarat High Court in Willowood. Here the
Court was considering a challenge to the constitutionality of Section 140(1) of the
Gujarat Goods and Services Tax Act. The vires of Rule 117 of the Central and the

GST LAW TIMES  7th May 2020  83