2024 (11) TMI 1169 - HC - GST

Denial of the input tax claim - Interpretation of Section 16(5) of the CGST Act regarding input tax credit - Circular issued by the Government of India bearing No. 237/31/2024-GST dated 15th October, 2024 - HELD THAT - By virtue of the above provision and the directions issued by the Central Government, the petitioner would be entitled to file a rectification application for consideration of the claim of input tax credit made in the return filed; if it has been so made in the returns filed as indicated from the demand-cum-show cause notice. The petitioner would be entitled to file such rectification application within the time stipulated in the circular, which shall be considered in terms of the newly incorporated provisions under Section 16(5) of the CGST Act and the Circular of the Central Government. The writ petition stands disposed of.

Summary

Issues:
Denial of input tax claim in assessment order for three months in the assessment year 2018-19; Interpretation of Section 16(5) of the CGST Act regarding input tax credit; Application of circular issued by the Government of India for rectification of order under special procedure.

Analysis:
The judgment concerns the denial of input tax claim in an assessment order for three months in the assessment year 2018-19. The petitioner's main contention was the rejection of input tax credit. The petitioner relied on Section 16(5) of the CGST Act, which allows for the input tax credit pertaining to specific financial years until a specified date. Additionally, a circular issued by the Government of India, specifically Clause 3.5 and 3.5.1, provided a procedure for rectification of orders confirming the demand for wrong availment of input tax credit. The circular allowed taxpayers to apply for rectification within a specified period from the date of issuance of the notification.

The Court acknowledged the provisions of Section 16(5) of the CGST Act and the directions issued by the Central Government through the circular. It concluded that the petitioner would be entitled to file a rectification application for consideration of the input tax credit claim made in the returns filed within the stipulated time frame mentioned in the circular. The Court emphasized that the rectification application would be considered in accordance with the newly incorporated provisions under Section 16(5) of the CGST Act and the Circular of the Central Government.

The judgment ultimately disposed of the writ petition, affirming the petitioner's entitlement to file a rectification application within the specified time frame for the consideration of the input tax credit claim, in line with the provisions of Section 16(5) of the CGST Act and the circular issued by the Government of India.