2025 (3) TMI 169 - HC - GST

Reversal of ITC claim - time limitation - HELD THAT - The issue involved in the present Writ Petition has been squarely covered by the common order of this Court in SRI GANAPATHI PANDI INDUSTRIES REP. BY ITS PROPRIETOR VERSUS THE ASSISTANT COMMISSIONER (STATE TAX) (FAC) TONDIARPET ASSESSMENT CIRCLE CHENNAI 2024 (10) TMI 1631 - MADRAS HIGH COURT 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. The impugned order dated 28.04.2024 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 issues presented and considered in the judgment are as follows:1. Whether the petitioner is entitled to claim Input Tax Credit (ITC) under the Goods and Service Tax Act, 2017 (GST Act) within the prescribed time limit.2. Whether the impugned orders of the respondent-Department, reversing the petitioner's claim of ITC and directing payment of tax/penalty/interest, are sustainable.Issue-Wise Detailed Analysis:Issue 1: Entitlement to Claim ITC- Relevant legal framework: Section 16(4) of the CGST Act, 2017- Court's interpretation and reasoning: The Court considered the challenges faced by the petitioners in filing returns due to various reasons such as financial constraints, health-related issues, and natural disasters. The Court noted the amendment to Section 16 of the CGST Act, allowing for the retrospective extension of the deadline for availing ITC.- Key evidence and findings: The Court highlighted the provisions of Section 16(4) and the subsequent insertion of Section 16(5) allowing for the availing of ITC until November 30, 2021, for certain financial years.- Application of law to facts: The Court applied the amended provisions of the CGST Act to allow the petitioners to avail ITC within the extended deadline.- Conclusions: The Court quashed the impugned orders related to the claim of ITC by the petitioners within the limitation period specified in Section 16(5) of the CGST Act.Issue 2: Sustainability of Impugned Orders- Relevant legal framework: Provisions of the CGST Act, 2017- Court's interpretation and reasoning: The Court considered the validity of the impugned orders in light of the subsequent developments and amendments to the CGST Act. It emphasized the importance of compliance with the amended provisions.- Key evidence and findings: The Court noted the recommendations of the GST Council, the amendments to Section 16 of the CGST Act, and the subsequent notifications and circulars issued by the authorities.- Application of law to facts: The Court held that the impugned orders were no longer sustainable in light of the amendments to the CGST Act and the extended deadline for availing ITC.- Conclusions: The Court quashed the impugned orders and directed the respondent-Department to take necessary steps to release frozen bank accounts of the petitioners and refund any tax amounts collected based on the impugned orders.Significant Holdings:- The Court held that the petitioners were entitled to avail ITC within the extended deadline provided by the amended provisions of the CGST Act.- The impugned orders reversing the petitioner's claim of ITC were quashed, and the respondent-Department was restrained from initiating further proceedings based on the issue of limitation.In conclusion, the Court allowed the Writ Petition on the grounds that the petitioners were entitled to claim ITC within the extended deadline and that the impugned orders were no longer sustainable in light of the amendments to the CGST Act. The Court directed the respondent-Department to take appropriate actions in accordance with the Court's orders.