2025 (2) TMI 340 - HC - GST

ITC on delayed returns - Constitutional validity of Section 16(4) of the Central Goods and Services Tax Act 2017 - violative of Article 14 Article 19(1)(g) and Article 300A of the Constitution of India or not - HELD THAT - In view of Clause (5) of Section 16 inserted by the Finance (No.2) Act 2024 with effect from 01.07.2017 the respondents are directed to allow the petitioner to take Input Tax Credit in respect of delayed returns filed for the Financial Year 2017-18 and the interest and penalty levied on the petitioner by the respondents shall be refunded with 6% p.a interest from the date of such collection till the date of repayment. Petition disposed off.

Summary

The Jharkhand High Court, presided over by the Chief Justice and Justice Deepak Roshan, addressed a writ petition challenging specific provisions of the Central Goods and Services Tax Act, 2017 and related rules. The petitioner sought to declare Section 16(4) of the CGST Act, 2017 as "ultra vires," arguing it unlawfully restricts the availment of Input Tax Credit (ITC) within a set timeframe, violating Articles 14, 19(1)(g), and 300A of the Constitution of India. Additionally, the petitioner contested the retrospective declaration of GSTR-3B as a return under Section 39 by Rule 61(5) of the CGST Rules, 2017, as amended by Notification No. 49/2019, claiming it interferes with vested rights.The court heard arguments from both sides and, referencing Clause (5) of Section 16 inserted by the Finance (No.2) Act, 2024, directed the respondents to permit the petitioner to claim ITC for delayed returns for the Financial Year 2017-18. Furthermore, it ordered the refund of interest and penalties collected from the petitioner, with an interest of 6% per annum from the collection date until repayment. Consequently, the writ petition was disposed of.