Page 86 - GSTL_2nd July 2020 _Vol 38_Part 1

4 GST LAW TIMES [ Vol. 38
Peoples Union of Civil Liberties v. Union of India — (2004) 2 SCC 476 — Relied on ................ [Paras 6, 7]
Ram Krishna Dalmia v. Justice S.R. Tendolkar — AIR 1958 SC 538 — Relied on ....................... [Paras 6, 7]
State of Uttar Pradesh v. Kartar Singh — AIR 1964 SC 1135 — Relied on .................................... [Paras 6, 7]
REPRESENTED BY : S/Shri Sujit Ghose and Krishna Rao for M/s. Adithya
Reddy, Advocates, for the Petitioner.
Ms. Hema Muralikrishnan, CGSC and MD. Shafiq,
Spl. Govt. Pleader, for the Respondent.
[Order per : S. Manikumar, J.]. - WP Nos. 8596 & 8597 of 2019, are filed
to declare the provisions of impugned clause (ii) to proviso to Section 54(3) of the
CGST Act, 2017, as ultra vires the Constitution of India, violative of the funda-
mental rights guaranteed by the Constitution under Article 14, 19(1)(g) of the
Constitution of India.
2. WP Nos. 8602 & 8603 of 2019, are filed to declare the provisions of
impugned Rule 89(5) of the CGST Rules, 2017, as ultra vires Article 14 of the Con-
stitution as also ultra vires Section 54 of the CGST Act, 2017 in so far as it excludes
the component of credit of input services from the definition of Net ITC in the
formula prescribed for claiming refund of unutilized credit in case of inverted
duty structure.
3. WP Nos. 8605 & 8608 of 2019, are filed for issuance of a mandamus,
directing 3rd respondent, herein to process and allow refunds in accordance with
law by factoring input services in the computation of Net ITC for the purpose of
formulae prescribed in Rule 89(5) of the TNGST Rules.
4. Mrs. Hema Muralikrishnan, Learned Central Government Standing
Counsel takes notice on behalf of respondents 1 and 2. Mr. Md. Shafiq, Learned
Special Government Pleader (Taxes) takes notice on behalf of 3rd respondent.
5. In WMP Nos. 9116 & 9118 of 2019 in WP Nos. 8602 & 8603 of 2019,
petitioner has sought for stay of the impugned Rule 89(5) of the CGST Rules,
2017 issued by Respondent No. 1 to the extent it seeks to define the term Net ITC
to exclude input taxes on services, pending disposal of the writ petitions.
6. On the above prayer, this Court deems it fit to consider few decisions
of the Hon’ble Supreme Court, on the presumption of the constitutionality of an
enactment.
(i) A Full Bench of the Hon’ble Supreme Court in Shri Ram Krishna
Dalmia v. Shri Justice S.R. Tendolkar reported in AIR 1958 SC 538 =
1959 SCR 279, has carved out the principles as follows :
“(b) that there is always a presumption in favour of the con-
stitutionality of an enactment and the burden is upon him who attacks
it to show that there has been a clear transgression of the constitutional
principles;
(c) that it must be presumed that the legislature understands
and correctly appreciates the need of its own people, that its laws are
directed to problems made manifest by experience and that its dis-
criminations are based on adequate grounds;
(d) that the legislature is free to recognise degrees of harm
and may confine its restrictions to those cases where the need is
deemed to be the clearest;

GST LAW TIMES  2nd July 2020  86