The Madras High Court while citing the Finance Act, 2024 held that the Input Tax Credit (ITC) is permissible when GST returns are filed on or before 30th November 2021 for FY 2017-18 to 2020-21.
The bench of Justice Krishnan Ramasamy while quashing the order reversing the ITC, observed that Section 16 of the CGST Act was amended and sub-section (5) was inserted to Section 16, which came into force with retrospective effect from 01.07.2017, the petitioners are entitled to avail ITC in respect of GSTR-3B filed in respect of FYs 2017-18, 2018-19, 2019-20 and 2020-21 as the case may be, on or before 30.11.2021.
The bench quashed the orders as it relates to the claim made by the petitioners for ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act, 2017 but, within the period prescribed in terms of Section 16 (5) of the GST Act.
The bench restrained the department from initiating any proceedings against the petitioners by virtue of the orders based on the issue of limitation and directed the respondent-Department to take immediate steps towards de-freezure of the concerned petitioners bank accounts, which have been freezed in furtherance of the orders, by sending intimation to the bankers.
Background
The petitioner/assessee is a registered dealer on the files of the respondent under the provisions of the Goods and Service Tax Act, 2017.
For the AY 2019-20, the petitioner filed the returns in GSTR-1 in time and filed GSTR-3B returns belatedly due to Covid-19, but, the respondent, without considering the reasons for the delay is genuine, passed the impugned order dated 06.06.2023, by which the ITC claim was reversed and also levied interest/penalty under Section 73 of the Act.
Arguments
The petitioners contended that during the 53rd GST Council Meeting, the GST Council recommended for extension of the deadline for availing ITC on any invoice or debit notice under Section 16(4) of the CGST Act and this extension would be applicable to any GSTR-3B returns filed for the Fys 2017-18, 2018-19, 2019-20 and 2020-21 with a new deadline deemed to be as ”30.11.2021” and to facilitate this extension, the Council also recommended a retrospective amendment to Section 16(4) of CGST Act w.e.f. 01.07.2017.
The department contended that as far as the impugned orders relating to other issues such as discrepancies in availing the ITC/wrong availment of ITC/excess claim of ITC/Fake ITC claim, as the case may be, he prayed that liberty may be granted to the Department to proceed against the assessees/petitioners in furtherance of the impugned orders in accordance with law.
Conclusion
The court stated that Section 16 (5) makes it clear that ‘notwithstanding anything contained in sub-section 4, in respect of any invoice or debit note for supply of goods or services or both pertaining to the FYs 2017-18 to 2020-21, the registered persons shall be entitled to take ITC in any return under section 39 which is filed upto the 30th day of November, 2021.
The court while allowing the petition stated that during the pendency of the Writ Petitions, if any orders are proposed to be passed towards recovery, same shall be dropped immediately upon production of the order copy by the petitioners, in whichever case, where there is no interim order.
The court stated that Insofar as the apprehension expressed by the learned Additional Advocate General for the respondent-Department that in certain Writ Petition apart from the issue on limitation, challenges have also been made to the order related to issues such as discrepancies in availing the ITC/wrong availment of ITC/excess claim of ITC/Fake ITC claim, as the case may be, or such other issues, liberty is be granted to the respondent-Department to proceed against the assessees/petitioners in furtherance of the impugned orders in accordance with law.
Case Details
Case Title: Sri Ganapathi Pandi Industries Versus The Assistant Commissioner (State Tax) (FAC)
Case No.: W.P.No.25081 of 2023
Date: 17.10.2024
Counsel For Petitioner: A.Chandrasekaran
Counsel For Respondent: Haja Nazurideen
