2025 (2) TMI 839 - HC - GST

Reversal of ITC claimed - timeliness of filing GSTR-3B returns for availing ITC due to various difficulties faced by the taxpayers - HELD THAT - The issue involved in the present Writ Petition has been squarely covered by the common order of this Court SRI GANAPATHI PANDI INDUSTRIES 2024 (10) TMI 1631 - MADRAS HIGH COURT batch wherein this Court has categorically held this Court considering the fact that the issue involved in all these Writ Petitions is only with regard to the availment of ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act and in the light of the subsequent developments took place whereby Section 16 of the CGST Act was amended and sub-section (5) was inserted to Section 16 which came into force with retrospective effect from 01.07.2017 the petitioners are entitled to avail ITC in respect of GSTR-3B filed in respect of FYs 2017-18 2018-19 2019-20 and 2020-21 as the case may be on or before 30.11.2021 is inclined to quash the impugned orders. Conclusion - The impugned order dated 26.02.2021 is quashed insofar as it relates to the claim made by the petitioner for ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act 2017 but within the period prescribed in terms of Section 16 (5) of the said Act - the respondent-Department is restrained from initiating any proceedings against the petitioners by virtue of the impugned order based on the issue of limitation. Petition allowed.

Summary

The High Court of Madras considered a writ petition filed by a taxpayer challenging orders passed by the tax department reversing their Input Tax Credit (ITC) claim under the Goods and Service Tax Act, 2017. The issue revolved around the timeliness of filing GSTR-3B returns for availing ITC due to various difficulties faced by the taxpayers. The court referred to a previous order where it was held that due to subsequent developments, taxpayers were entitled to avail ITC for specified financial years until November 30, 2021, despite the limitation under Section 16(4) of the CGST Act. The court quashed the impugned orders, restrained the tax department from initiating proceedings based on the limitation issue, directed unfreezing of bank accounts, and ordered refunds of tax amounts collected based on the impugned orders. The court granted liberty to the tax department to proceed against taxpayers for other issues such as discrepancies in ITC claims. The writ petition was allowed with no costs.The court's analysis focused on the amendments to Section 16 of the CGST Act, particularly the insertion of sub-section (5) allowing taxpayers to avail ITC until November 30, 2021, for specified financial years. The court emphasized that due to these amendments and subsequent developments, the impugned orders were no longer sustainable. The court's reasoning was based on the retrospective effect of the amendments and the relief provided to taxpayers in light of the extended deadline for availing ITC.The key evidence considered by the court was the notification issued by the Ministry of Finance, Circular No.237/31/2024-GST, and the recommendations of the 53rd GST Council Meeting regarding the extension of the deadline for availing ITC. These pieces of evidence supported the court's interpretation that taxpayers were entitled to avail ITC within the extended deadline despite the limitation under Section 16(4) of the CGST Act.The court's conclusions included quashing the impugned orders, restraining the tax department from further actions based on the limitation issue, directing unfreezing of bank accounts, and ordering refunds of tax amounts collected. The court also granted liberty to the tax department to proceed against taxpayers for other issues related to ITC claims.In summary, the court's judgment provided relief to taxpayers by allowing them to avail ITC within the extended deadline despite initial limitations, emphasizing the importance of subsequent developments and amendments to the law in determining the rights of taxpayers in such cases.