2024 (10) TMI 1029 - HC - GST

Challenge to Recovery notice - rejection of Input Tax Credit - HELD THAT - A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in the case of M/S. SADHANA ENVIRO ENGINEERING SERVICES VERSUS THE JOINT COMMISSIONER OF CENTRAL TAX; THE PRINCIPAL COMMISSIONER OF CENTRAL TAX BENGALURU; UNION OF INDIA; STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY, BANGALORE 2024 (9) TMI 1648 - KARNATAKA HIGH COURT where it was held that ' The respondents are directed to unblock and release the credit balance of the petitioner in their ITC Ledger / Account, if not already released, immediately / forthwith upon receipt of a copy of this order without any delay.' Petition is hereby disposed of in terms of the judgment of this Court in the case of M/s. Sadhana Enviro Engineering Services vs. Joint Commissioner of Central Tax others - the impugned Order is set aside - petition allowed.

Summary

Issues:
1. Quashing of recovery notice issued under KGST Act
2. Quashing of assessment order rejecting input credit claim
3. Quashing of notice rejecting input credit benefits
4. Direction to allow input tax credit benefits
5. Implementation of amended provisions under Section 16(5) of CGST/KGST Act

Analysis:

Issue 1: Quashing of recovery notice under KGST Act
The petitioner sought a writ of certiorari to quash the recovery notice issued under the KGST Act for the period of April 2018 to March 2019. The court noted the petitioner's request and directed the respondents to implement the amended provisions under Section 16(5) of the CGST Act within a specified timeframe.

Issue 2: Quashing of assessment order rejecting input credit claim
The petitioner also sought to quash the assessment order rejecting the input credit claim of Rs. 35,3900 and imposing penalties. The court acknowledged the insertion of Section 16(5) through "The Finance (No. 2) Act, 2024," extending the time limit for availing credit. The court directed the respondents to implement the amended provisions and quashed the impugned blocking of the Input Tax Credit (ITC) ledger.

Issue 3: Quashing of notice rejecting input credit benefits
Additionally, the petitioner requested the quashing of a notice rejecting input credit benefits. The court, in line with the earlier judgment and the amended provisions, directed the respondents to provide a reasonable opportunity to the petitioner and proceed in accordance with the law within a specified timeframe.

Issue 4: Direction to allow input tax credit benefits
The petitioner sought a writ of mandamus to allow claiming input tax credit benefits. The court, considering the insertion of Section 16(5) and the petitioner's entitlement to credit, directed the respondents to unblock and release the credit balance in the petitioner's ITC Ledger without delay.

Issue 5: Implementation of amended provisions under Section 16(5) of CGST/KGST Act
The court emphasized the significance of the amended provisions under Section 16(5) of the CGST Act, inserted through "The Finance (No. 2) Act, 2024," extending the time limit for availing input tax credit. The court disposed of the petition in accordance with the judgment in a similar case and directed the parties to comply with the amended provisions within a specified timeframe.

In conclusion, the court's judgment focused on the implementation of the amended provisions under Section 16(5) of the CGST Act, extending the time limit for availing input tax credit, and directed the respondents to provide a reasonable opportunity to the petitioner and proceed in accordance with the law.