2025 (3) TMI 246 - HC - GST

Reversal of ITC claim - imposition of tax penalty and interest - 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 that The orders impugned in all Writ Petitions are quashed insofar as it relates to the claim made by the petitioners 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 order impugned in all Writ Petition 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 - petition allowed.

Summary

The case involves a writ petition filed by a taxpayer challenging an order passed by the tax department under the Goods and Service Tax Act, 2017 (GST Act) regarding the reversal of Input Tax Credit (ITC) and the imposition of tax/penalty/interest. The court considered the issue of ITC availed by the petitioners being barred by limitation under Section 16(4) of the CGST Act, in light of subsequent developments, including the amendment to Section 16 and the extension of the deadline for availing ITC.**Issues Presented and Considered:**1. Whether the claim of ITC by the petitioners was rightly reversed by the tax department.2. Whether the petitioners are entitled to avail ITC within the extended deadline under Section 16(5) of the CGST Act.3. Whether the impugned orders of the tax department are sustainable in light of the subsequent developments.**Issue-wise Detailed Analysis:**- The court considered the provisions of the GST Act, specifically Section 16(4) and the subsequent amendment with the insertion of Section 16(5) allowing for the availing of ITC until November 30, 2021.- The court interpreted the legislative intent behind the amendment and the extension of the deadline for availing ITC.- Key evidence included the petitioners' reasons for the delay in filing GSTR-3B returns and claiming ITC, as well as the subsequent developments in the GST Council meetings and notifications issued by the government.- The court applied the law to the facts by determining that the petitioners were entitled to avail ITC within the extended deadline.- Competing arguments centered around the tax department's contention that the ITC claim was barred by limitation and the petitioners' argument that they should be allowed to avail ITC within the extended deadline.- The court concluded that the impugned orders were not sustainable in light of the subsequent developments and allowed the writ petition, quashing the orders related to the ITC claim barred by limitation.**Significant Holdings:**- The court held that the petitioners were entitled to avail ITC within the extended deadline under Section 16(5) of the CGST Act.- The court directed the tax department to refrain from initiating proceedings against the petitioners based on the limitation issue and to take steps to de-freeze the petitioners' bank accounts.- The court granted liberty to the tax department to proceed against the petitioners on other issues apart from the limitation issue.In conclusion, the court allowed the writ petition, quashed the impugned orders related to the ITC claim barred by limitation, and directed the tax department to take necessary actions in accordance with the court's decision.