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2024 (6) TMI 1097 - HC - GSTIssues: 1. Application for extension under Section 140 (5) of the CGST Act rejected by Assistant Commissioner. 2. Confirmation of tax demand by Additional Commissioner due to rejection of extension application. 3. Interpretation of transitional provisions under GST Regime. 4. Eligibility criteria and time limits for taking credit under Section 140 (5) of the CGST Act. 5. Petitioner's claim of cyber attack affecting timely recording of invoices. 6. Legal validity of extension application timeline under Section 140 (5) of the CGST Act. Analysis: 1. The petition challenges the rejection of an application for extension under Section 140 (5) of the CGST Act by the Assistant Commissioner, followed by the confirmation of tax demand by the Additional Commissioner due to the rejection. The key contention revolves around the timeline for filing the extension application and the subsequent impact on the taxpayer's eligibility for credit under the GST regime. 2. The judgment delves into the transitional provisions of the GST Regime, which aimed to facilitate the smooth transition of credits from previous taxation regimes to the new GST framework. Specific provisions under Section 140 of the CGST Act allowed taxpayers to carry forward old credits into the GST Regime, emphasizing the importance of timely compliance with prescribed procedures. 3. Section 140 (5) of the CGST Act outlines the criteria for taking credit of eligible duties and taxes, requiring invoices to be recorded in the books of accounts within a specified period. The provision allows for an extension of this period by the Commissioner upon showing sufficient cause, without specifying a deadline for filing the extension application. 4. The petitioner's case highlights the impact of a cyber attack on the timely recording of invoices, leading to a delay in compliance with the prescribed timeline. The petitioner sought an extension based on valid reasons, which was initially rejected by the tax authorities, triggering the legal challenge and subsequent judicial review. 5. The High Court, in its analysis, emphasized that Section 140 (5) of the CGST Act does not mandate a specific deadline for filing the extension application. Therefore, the rejection of the application solely based on the timing of submission was deemed incorrect, leading to the quashing of the impugned orders. 6. The judgment concludes by setting aside the challenged orders and remanding the matter to the tax authorities for a reevaluation of the petitioner's claim for Input Tax Credit (ITC). The court directs a detailed review and a reasoned decision by Respondent No. 4, providing the petitioner with a personal hearing and ensuring a comprehensive assessment of the submissions before issuing a final order by a specified deadline. This detailed analysis of the judgment showcases the intricate legal interpretation of transitional provisions under the GST regime and the critical importance of procedural compliance and fair consideration of extension requests in tax matters.
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