downloaded - 2026-06-17T111817.985

Challenge to the constitutional validity and vires of Rule 39(1)(a) of the CGST/TNGST/PUGST Rules, which require an Input Service Distributor to distribute input tax credit in the same month as the date of the underlying input service invoice, and quashing of show cause notices.

Petitioners sought (i) declarations that Rule 39(1)(a) is manifestly arbitrary, violative of Article 14, and ultra vires Section 20 of the CGST/State GST Acts, both before and after 01.04.2025; and (ii) certiorari to quash the show cause notices dated 27.06.2025 and 26.06.2025.

The petitioner, having multiple GST registrations across States, argued that the rule requiring ISD to distribute ITC in the same month as the invoice date is impossible to comply with, arbitrary, and beyond the rule-making power of the government, especially for the pre-amendment period where Section 20 lacked authority to prescribe a time limit.

Whether Rule 39(1)(a) prior to 01.04.2025 is ultra vires Section 20 of the CGST/TNGST Act. Whether Rule 39(1)(a) after 01.04.2025 is manifestly arbitrary and violates Article 14 of the Constitution. Whether the rule can be applied retrospectively to periods prior to the amendment. Whether the show cause notices are without jurisdiction and liable to be quashed.

Rule 39(1)(a) requiring distribution in the same month as invoice is impossible and arbitrary. Pre-amendment, Section 20 did not authorize time limit, so the rule was ultra vires. Post-amendment rule applies prospectively; absence of savings clause means no retrospective application. Rule 39(1)(a) should be read down so that credit is distributable only when conditions under Section 16 are satisfied. Show cause notice is unsustainable as the rule was substituted without savings clause and cannot apply for past periods.

Rule 39(1)(a) of the Central Goods and Services Tax Act, 2017, as it stands after 01.04.2025, to the extent that it requires ITC to be distributed by an ISD in the same month as the date of the underlying input service invoice, as being manifestly arbitrary and violative of Article 14 of the Constitution the ISD is not only required to determine to which recipient unit the input service invoice is attributable to, but also whether the said input service invoice pertains to eligible credit or ineligible credit and whether the conditions under the CGST Act/TNGST Act have been fulfilled qua such invoices

Two writ petitions filed under Article 226 of the Constitution. Show cause notices dated 26.06.2025 and 27.06.2025 were issued by the Commissioner of Central Tax for financial years 2018-2019 to 2023-2024. The matter was heard and reserved on 09.12.2025. The common order was delivered on 05.03.2026. The judgment text does not include the final disposition.

• Central Goods and Services Tax Act, 2017: 20, 16(2), 16(4), 164
• Tamil Nadu Goods and Services Tax Act, 2017: 20, 16(2), 16(4)
• Puducherry Goods and Services Tax Act, 2017: 20
• Constitution of India: Article 14, 226