New Delhi, Sep 18 : The Delhi High Court on Tuesday asked the Centre to respond within six weeks on a plea that challenged a legal provision to amend the Central Goods and Services Tax rules retrospectively.
A division bench of Justice Sanjiv Khanna and Justice Chander Shekhar listed the matter for January 8 next year.
The court was hearing a plea by a company, N.
Ranga Rao and Sons Private Limited, to seek quashing of Section 164 (3) of the Central Goods and Services Tax Act which empowers the Central government to enact rules under the Act with retrospective effect.
The company is into manufacture, sale and marketing of a wide range of incense and joss sticks, and kits for religious rituals.
The company sought court direction to declare Section 164(3) as "unconstitutional being violative of Articles 14, 19(1)(g), 265 and 300A of the Constitution of India."
The plea said that the Section gives wide and unbridled power to the government as it does not lay down any policy, principle or standard on the basis of which the government may make retrospective rules, especially in the context of violation of vested rights by such rules.
It also challenges the constitutional validity of the newly amended Rule 89(5) of the Central Goods and Services Tax Rules, 2017.
"With the introduction of the GST laws, a regime of inverted tax structure has been created.
When the tax paid on inward supply is greater than the tax paid on the outward supplies, it results in accumulation of input tax credit for the assessee," the plea said.