2024 (11) TMI 184 - HC - GST

Extension of time limits under Section 73 of the CGST/AGST Act, 2017 due to Covid-19 - force majeure condition - Challenge to N/N. 09/2023-Central Tax dated 31.03.2023 and N/N. 56/2023-Central Tax dated 28.12.2023 extending the period of issuance of the orders u/s 73 of the CGST Act, 2017 - HELD THAT - A careful perusal of the provisions revealed that notwithstanding anything contained under Section 16 (4) of the CGST Act, 2017 in respect of any invoice or debit note for supply of goods or services or both pertaining to financial years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under Section 39 which is filed upto 30th day of November, 2021. Reading of these amended provisions reveal that the challenge made in the writ petition before this Court is no longer required to be addressed in view of the amendments brought in by the Finance (No. 2) Act, 2024. In view of the amendments brought in it is evident that the petitioner is entitled to avail the benefit of input tax credit for the relevant period. In view of the amendments brought in, the petitioner is entitled to get the claim of the input tax credit subject to the conditions prescribed in the newly inserted Section 16 (5) and Section 16 (6) of the CGST Act, 2017 inserted by Finance (No. 2) Act, 2024 . In view of the amendments brought into the statute by the Finance (No. 2) Act, 2024 and which amendments have been given retrospective effect from 01.07.2017, the proceedings initiated against the petitioner by way of show-cause notice No. ZD181223004588F dated 06.12.2023 have been rendered redundant. Since the decision has already been taken that the same notification is required to be issued by the State Government, taking such submissions into account, this Court deems it proper to close the instant writ petition by setting aside the impugned order bearing Reference No. ZD180224009080Z dated 09.02.2024 passed by the respondent no. 5. The matter now stands remanded back to the competent jurisdictional officer to pass appropriate order - Petition disposed off by way of remand.

Issues Involved:
1. Extension of time limits under Section 73 of the CGST/AGST Act, 2017 due to the Covid-19 Pandemic.
2. Invocation of "force majeure" under Section 168A of the CGST Act, 2017.
3. Legitimacy of notifications extending the period for issuance of orders under Section 73.
4. Amendments to Section 16 of the CGST Act, 2017 by the Finance (No. 2) Act, 2024.
5. Entitlement to input tax credit for financial years 2017-18 to 2020-21.

Detailed Analysis:

1. Extension of Time Limits Under Section 73:
The petitioner challenged the extension of time limits prescribed under Section 73 of the CGST/AGST Act, 2017. Initially, the due date for filing annual returns for the financial year 2017-18 was extended multiple times due to the Covid-19 Pandemic, with the final extension reaching up to 30.09.2023. The petitioner argued that the pandemic situation ended in 2022, questioning the rationale behind further extensions.

2. Invocation of "Force Majeure" Under Section 168A:
The government invoked Section 168A to extend deadlines, citing the pandemic as a "force majeure" condition. The petitioner contested this invocation, arguing that the pandemic's impact did not justify extensions beyond 2022. The court considered whether the extension was justified under the "force majeure" provisions.

3. Legitimacy of Notifications Extending the Period for Issuance of Orders:
The petitioner challenged specific notifications (No.09/2023-Central Tax and No.56/2023-Central Tax) that extended the period for issuing orders under Section 73. The petitioner claimed these extensions lacked bona fide reasoning and were unjustified post-2022. The court examined whether these notifications were validly issued under the circumstances.

4. Amendments to Section 16 of the CGST Act, 2017:
Amendments to Section 16, introduced by the Finance (No. 2) Act, 2024, were central to the case. These amendments allowed registered persons to claim input tax credit for invoices or debit notes from financial years 2017-18 to 2020-21 until 30th November 2021. The court noted that these amendments effectively addressed the petitioner's grievances regarding input tax credit entitlement.

5. Entitlement to Input Tax Credit:
The court acknowledged that the amendments to Section 16 provided the petitioner with the right to claim input tax credit for the relevant financial years. The amendments, effective retrospectively from 01.07.2017, rendered the proceedings against the petitioner redundant. Consequently, the court set aside the impugned order and remanded the matter to the competent jurisdictional officer for appropriate action.

Conclusion:
The court concluded that the amendments to Section 16 of the CGST Act, 2017, resolved the issues raised in the writ petition. The petitioner was entitled to claim input tax credit as per the amended provisions, rendering the earlier show-cause notice and order redundant. The court disposed of the writ petition, setting aside the impugned order and remanding the matter for further proceedings if necessary.

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