Page 23 - GSTL_27th August 2020_Vol 39_Part 4

2020 ] LEGISLATIVE COMPETENCE OF RULES 36(4) AND 86A OF CGST RULES, 2017 J79
Further Rule 86A of the CGST Rules, 2017 has conferred the power on
the Commissioner to deprive the assessee from utilizing the credit available in
the Electronic Credit Ledger having reasons to believe that credit has been
fraudulently availed or ineligible credit has been availed.
In view of the above
(a) Rule 36(4) of the CGST Rules has created new conditions for avail-
ing the credit and
(b) Rule 86A has deprived the assessee to utilize the credit of the input
tax which is the property of the assessee.
Delegated Legislation
Rules 86A and 36(4) of the CGST Rules, 2017 are Delegated Legislation.
Delegated legislation permitted by enabling Acts appears under different
names. ‘Rule’ and ‘Order’ are by far most common names under which delegat-
ed legislation is permitted.
Regulation may be made as a rule and then it partake the character of a
Rule.
It is observed that the above Rules 86A and 36(4) are independent. There
is no provisions in the enabling Act (CGST Act, 2017) which restricts the credit to
avail and which impose restriction to utilize the credit once credited is credited
to Electronic Credit Ledger.
Rules to be in conformity with the enabling Act
The power to make subordinate legislation is derived from the Enabling
Act and it is fundamental that the delegate on whom such power is conferred has
to act within the limits of authority conferred by the Act - Hukamchand v. Union of
India, AIR 1972 SC 2427.
Rules cannot be made to supplant the provisions of the enabling Act but
to supplement it - St. Johns Teachers Training Institute v. Regional Director, (2003) 3
SCC 451.
Benefit of doubt in favour of the constitutional validity
In considering the vires of subordinate legislation one should start with
presumption that it is intra vires. The principle means that if subordinate legisla-
tion under consideration is open to two constructions, one of which would make
it bad and other good, the Courts must adopt that construction which makes it
goods. - St. Johns Teachers Training Institute v. Regional Director, (2003) 3 SCC 451.
General power by the enabling Act to make Rules is not to extend scope of Act
Rules 86A and 36(4) of the CGST Rules, 2017 has extended the scope of
Sections 16, 17 and 18 of the CGST Act, 2017.
Restriction to avail the credit is contained in Section 17 and same is ex-
haustive. Further conditions to avail the credit as given in Sections 16(2), 16(3)
and 16(4) of the CGST Act, 2017 are also exhaustive. Once the conditions to avail
the credit has been complied and the credit of the input tax does not fall within
the ambit of the restrictive list laid down in Section 17, the assessee should not be
restricted to utilize the credit which has been done by Rule 86A of the CGST
Rules, 2017.

GST LAW TIMES  27th August 2020  23