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TMI Blog2019 (3) TMI 1822X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed 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 Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the need is deemed to be the clearest and finally that in order to sustain the presumption of constitutionality the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation." (iii) In Mahant Moti Das v. S.P. Sahi, the Special Officer In Charge of Hindu Religious Trust & Ors. reported in AIR 1959 SC 942, the Hon'ble Supreme Court, held as follows : "The decisions of this Court further establish that there is a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional guarantee; that it must be presumed that the legislature understands and correctly appreciates the needs of its own people and that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds; and further 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....." (iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IR 1978 SC 771 = 1978 SCR (2) 537, a Constitutional Bench of the Hon'ble Supreme Court held as follows : "It is obvious that the legislature is in the best position to understand and appreciate the needs of the people as enjoined by the Constitution to bring about social reforms for the upliftment of the backward and the weaker sections of the society and for the improvement of the lot of poor people. The Court will therefore, interfere in this process only when the statute is clearly violative of the right conferred on the citizen under Part III of the Constitution or when the Act is beyond the legislative competence of the legislature or such other grounds. It is for this reason that the Courts have recognised that there is always a presumption in favour of the constitutionality of a statute and the onus to prove its invalidity lies on the party which assails the same." (vii) In M.L. Kamra v. Chairman-Cum-Managing Director, New India Assurance Co. Ltd., reported in 1992 AIR 1072 : 1992 SCR (1) 220, the Hon'ble Supreme Court held as follows : "It is settled law that there is a presumption of constitutionality of the rule. The Court ought not to interpret the statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption in favour of the constitutionality of Statute, and the burden is always upon the person who attacks it to show that there has been a clear transgression of a constitutional provision. This view was adopted by the Constitution Bench of this Court in Charanjit Lal Chowdhury v. Union of India and others [AIR 1951 SC 41 (para 10)], which observed : "Prima facie, the argument appears to be a plausible one, but it requires a careful examination, and while examining it, two principles have to be borne in mind : (1) that a law may be constitutional even through it relates to a single individual, in those cases where on account of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; (2) that it is the accepted doctrine of the American Courts, which I consider to be well-founded on principle, that the presumption is always in favour of the constitutionality 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. A clear enunciation of this latter doctrine is to be found in Middlet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d another, AIR 2001 SC 724 (vide para 9) a Constitution Bench of this Court observed : "There is always a presumption that the legislature does not exceed its jurisdiction and the burden of establishing that the legislature has transgressed constitutional mandates such as, those relating to fundamental rights is always on the person who challenges its vires. Unless it becomes clear beyond reasonable doubt that the legislation in question transgresses the limits laid down by the organic law of the Constitution it must be allowed to stand as the true expression of the national will Shell Company of Australia v. Federal Commissioner of Taxation, 1931 AC 275 (Privy Council). The aforesaid principle, however, is subject to one exception that if a citizen is able to establish that the legislation has invaded his fundamental rights then the State must justify that the law is saved. It is also a cardinal rule of construction that if one construction being given the statute will become ultra vires the powers of the legislature whereas on another construction which may be open, the statute remains effective and operative, the Court will prefer the latter, on the ground that the legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arve out a classification which is based upon intelligible differentia and has rational nexus to the object of the Act. The burden to prove that the enacted law offends any of the Articles under Part III of the Constitution is on the one who questions the constitutionality and shows that despite such presumption in favour of the legislation, it is unfair, unjust and unreasonable." 7. In view of the above decisions, we are not inclined to grant stay. Hence, WMP Nos. 9116 & 9118 of 2019 in WP Nos. 8602 & 8603 of 2019, are dismissed. 8. Further, in WMP Nos. 9121 & 9123 of 2019 in WP Nos. 8605 & 8608 of 2019, writ petitioner has sought for interim directions to the 3rd respondent to be taken on record the petitioner's claim for refund of unutilized credit, as and when filed, arising under Section 54(3) of the TNGST Act by including input service within the meaning of the term Net ITC, pending disposal of the writ petition. 9. Interim direction as prayed for if granted would amount to granting the main relief itself. hence, prayer sought for in WMP Nos. 9121 & 9123 of 2019 in WP Nos. 8605 & 8608 of 2019, cannot be granted. 10. In order to save limitation, Mr. Suj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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