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2024 (12) TMI 330 - HC - GSTAvailment of Input tax credit - Interpretation and application of Section 16(5) of the CGST Act, 2017 - HELD THAT - The issue arising out of belated availing of input tax under Section 16 of CGST Act, 2017 has been addressed by the Parliament by inserting Section 16 (5) of the Act. In fact, this Court has taken note of the same and passed an order in M/S. SAGAR BRUSH INDUSTRIES, REP. BY ITS PROPRIETOR PREM SAGAR, MADURAI VERSUS THE STATE TAX OFFICER, OFFICE OF THE ASSISTANT COMMISSIONER (ST) , MADURAI. 2024 (8) TMI 386 - MADRAS HIGH COURT where it was held that ' Wherever there is a delay in availing input tax credit for the Assessment Years 2017-2018 upto 2020-2021, the Parliament has extended an olive branch to taxpayers in terms of the proposals contained in Clause 114 of the Finance (No.2) Bill, 2024.' Now 16(5) is a reality and has also notified by the Central Government under Notification No.22/2024-CENTRAL TAX dated 08.10.2024. The impugned order is set aside and the matter is remitted back to the respondent to pass a fresh order on merits and in accordance with the statutory amendment of Section 16 of CGST Act, this writ petition stands allowed.
Issues:
1. Challenge to an impugned order dated 06.07.2021 passed by the respondent regarding availing of input tax credit. 2. Interpretation and application of Section 16(5) of the CGST Act, 2017. 3. Setting aside the impugned order and remitting the matter back to the respondent. Detailed Analysis: 1. The petitioner challenged the impugned order dated 06.07.2021, which held that the petitioner had contravened Section 16(4) of the CGST Act, 2017 by failing to avail input tax credit within the prescribed time limit. The order stated that the petitioner was liable to pay a specific amount by cash due to the ineligibility of the availed input tax credit. The order invoked the provisions of Section 73(1) of the CGST Act, 2017, along with Rule 142(1)(a) of the CGST Rules, 2017. The High Court noted the issue of belated availing of input tax credit under Section 16 and referred to a previous order in a similar case. The Court highlighted the need to consider the statutory amendments in such cases. 2. The Court referred to the insertion of Section 16(5) in the CGST Act, 2017 by the Parliament to address issues related to delayed input tax credit. It mentioned a previous order where cases were remitted back based on proposed amendments in the Finance (No.2) Bill, 2024. The Court emphasized the significance of Clause 114 of the Bill, which sought to amend Section 16 by adding subsections 5 and 6. These subsections provided provisions for availing input tax credit for specific financial years until a designated date. The Court highlighted the extension of the deadline for availing input tax credit and the subsequent notification of Section 16(5) by the Central Government. 3. Considering the statutory amendment of Section 16 of the CGST Act, the High Court set aside the impugned order and remitted the matter back to the respondent for a fresh decision based on the amended provisions. The Court allowed the writ petition, indicating that the impugned order did not align with the current legal framework. The judgment concluded by stating that no costs were imposed, and the connected Writ Miscellaneous Petitions were closed in light of the decision to set aside the original order and remit the matter back for reconsideration in line with the statutory amendments.
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