Page 84 - GSTL_7th May 2020_Vol 36_Part 1

42 GST LAW TIMES [ Vol. 36
Gujarat Goods and Services Tax Rules was also challenged. Prayers were sought
to permit carry forward of the Cenvat credit. Gujarat High Court took a review
of case law on the subject. It referred to [Section 140] of the Act. It observed thus :
“25. Section 140 of the Act envisages certain benefits to be carried forward dur-
ing the regime change. As is well-settled, the reduced rate of duty or concession in
payment of duty are in the nature of an exemption and is always open for the Legis-
lature to grant as well as to withdraw such exemption. As noted in case of Jayam
& Co. [2016] 96 VST 1 (SC) : [2016] 15 SCC 125, the Supreme Court had ob-
served that input tax credit is a form of concession provided by the Legisla-
ture and can be made available subject to conditions. Likewise, in the case
of Reliance Industries Limited [2018 (50) G.S.T.R. 14 (S.C.) : [2017] 16 SCC 28,
it was held and observed that how much tax credit has to be given and un-
der what circumstances is a domain of the Legislature. In the case of Godrej
& Boyce Mfg. Co. Pvt. Ltd. [1992] 87 STC 186 (SC) : [1992] 3 SCC 624, the Su-
preme Court had upheld a rule which restricts availment of Modvat credit
to six months from the date of issuance of the documents specified in the
proviso. The contention that such amendment would take away an existing
right was rejected.
(Emphasis supplied)
The Gujarat High Court held that the input tax credit under Section 140 was a
matter of concession. The contention of the Petitioner that Gujarat High Court in
Willowood has mixed up various concepts is neither warranted nor justified. The
arguments were advanced regarding the reasonableness of restriction and the
rule making power and that the input credit being a right or otherwise, and they
were considered together. The Court kept in mind the distinction between the
concepts. Merely because various heads of challenges have been dealt with to-
gether, it does not mean they have been mixed up.
40. Division Bench of this Court in JCB India Ltd. considered the provi-
sions of Section 140 of the Act. Here the petitioner manufactured certain heavy
machinery had in certain stock machines as of 30 June, 2016, and according to it,
it did not have to pay excise duty again after the onset of GST regime. In this con-
text, the challenge was made to the provision. The Petitioner had contended that
input tax credit being an integral part of GST law; it is a right, and it is not a con-
cession by the Government. The Respondent-State contended the claim of the
Petitioner that the credit being right. The contention of the State is reproduced in
para 30, which is the same advanced before us, is as under :-
“30. Our attention has been invited by Mr. Anil Singh to the settled prin-
ciple that insofar as economic legislation is concerned, the grounds on
which its constitutionality can be challenged are extremely limited. In the
sense, if that legislation incorporates a policy measure, then the wisdom
thereof cannot be questioned by this Court. Mr. Anil Singh would submit that
this matter is of a concession or relaxation. Nobody can claim a vested right in such
measures evolved by the Legislature. It is entirely for the Legislature to make a pro-
vision and restrict the benefit or concession or relaxation either to a class of persons
or even if it extends to all, it can restrict the term or period or limit up to which the
concession can be availed of. In the instant case, the period of twelve months is
provided as a safeguard against potential misuse of availment of credit dur-
ing the transition period by placing restriction on availing credit based on
documents which are not very old. There is no concept as equality in Tax
matters. Apart therefrom, similar restrictions had been in place on the
manufacturers/service providers under the Fifth proviso to sub-rule (7) of

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