2024 (11) TMI 182 - HC - GST

Extension of due dates under Section 73 of the CGST/AGST Act, 2017 due to Covid-19 Pandemic - time limit prescribed under Section 73 of the CGST/AGST Act, 2017 - invocation of Section 168A of the CGST Act, 2017 - force majeure condition - HELD THAT - A careful perusal of the provisions revealed that notwithstanding anything contained under Section 16 (4) of the CGST Act, 2017 in respect of any invoice or debit note for supply of goods or services or both pertaining to financial years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under Section 39 which is filed upto 30th day of November, 2021. Reading of the amended provisions reveal that the challenge made in the writ petition before this Court is no longer required to be addressed in view of the amendments brought in by the Finance (No. 2) Act, 2024. In view of the amendments brought in it is evident that the petitioner is entitled to avail the benefit of input tax credit for the relevant period. It is also submitted by the learned Standing Counsel, AGST that similar notification is required to be issued by the State respondents. The learned Standing Counsel for the respondents fairly submit that in view of the amendments brought in by the Finance (No. 2) Act, 2024 and in view of the Notification No. 17/2024 dated 27.09.2024, the amendments brought in to Section 16 have already taken effect and with retrospective effect from 01.07.2017. As such, in view of the amendments brought in, the petitioner is entitled to get the claim of the input tax credit subject to the conditions prescribed in the newly inserted Section 16 (5) and Section 16 (6) of the CGST Act, 2017 inserted by Finance (No. 2) Act, 2024 . In view of the amendments brought into the statute by the Finance (No. 2) Act, 2024 and which amendments have been given retrospective effect from 01.07.2017, the proceedings initiated against the petitioner by way of show-cause notice reference No. ZD18002240142212 dated 15.02.2024 has been rendered redundant. Since the decision has already been taken that the same notification is required to be issued by the State Government, taking such submissions into account, this Court deems it proper to close the instant writ petition by setting aside the impugned order bearing Reference No. ZD180324001417Q dated 02.03.2024 passed by the respondent no.5. The matter now stands remanded back to the competent jurisdictional officer to pass appropriate order(s) if need be. Petition disposed off by way of remand.

Summary

Issues Involved:

1. Extension of due dates under Section 73 of the CGST/AGST Act, 2017 due to Covid-19 Pandemic.
2. Invocation of Section 168A of the CGST Act, 2017 for "force majeure" conditions.
3. Issuance of show-cause notice and subsequent order against the petitioner.
4. Amendments to Section 16 of the CGST Act, 2017 by the Finance (No. 2) Act, 2024.
5. Entitlement of the petitioner to input tax credit.

Detailed Analysis:

1. Extension of Due Dates Under Section 73:

The petitioner challenged the extension of due dates for issuing orders under Section 73 of the CGST/AGST Act, 2017, which were extended due to the Covid-19 Pandemic. Initially, the due date for filing the annual return for the financial year 2017-18 was extended to 31.01.2020, and further to 07.02.2020 for the State of Assam. The petitioner argued that the Covid-19 Pandemic ended in 2022, and there was no justification for extending the due dates up to 31.12.2023.

2. Invocation of Section 168A for "Force Majeure" Conditions:

The government invoked Section 168A of the CGST Act, 2017, which allows for the extension of time limits under special circumstances, including "force majeure" conditions. The petitioner contended that the invocation of Section 168A was not bona fide, as the Covid-19 Pandemic did not persist beyond 2022. The petitioner argued that the extensions were unjustified and lacked proper reasoning beyond the "force majeure" condition.

3. Issuance of Show-Cause Notice and Subsequent Order:

The petitioner received a show-cause notice alleging the availing of ineligible input tax credit (ITC) for the financial year 2018-19, amounting to Rs. 57,32,849/-. Despite submitting a reply, the authorities confirmed a demand of Rs. 1,14,65,698/- against the petitioner. The petitioner challenged the show-cause notice and the order, arguing that the extensions were improperly invoked.

4. Amendments to Section 16 by Finance (No. 2) Act, 2024:

The GST Council decided on amendments to Section 16 of the CGST Act, 2017, effective from 27.09.2024. These amendments allowed registered persons to claim input tax credit for invoices or debit notes pertaining to financial years 2017-18 to 2020-21, filed up to 30th November 2021. The amendments also provided conditions under which input tax credit could be claimed if registration was canceled and subsequently revoked.

5. Entitlement to Input Tax Credit:

The court concluded that the amendments rendered the petitioner's challenge redundant, as the petitioner was entitled to claim input tax credit subject to the conditions in the newly inserted Sections 16 (5) and 16 (6) of the CGST Act, 2017. Consequently, the show-cause notice and order against the petitioner were set aside, and the matter was remanded to the competent jurisdictional officer for appropriate action.

Conclusion:

The writ petition was disposed of in light of the amendments brought by the Finance (No. 2) Act, 2024, which provided retrospective entitlement to input tax credit for the petitioner. The court set aside the impugned order and remanded the matter to the jurisdictional officer to pass necessary orders.