2024 (11) TMI 183 - HC - GST

Extension of time limits under Section 73 of the CGST/AGST Act, 2017 due to Covid-19 - force majeure condition - Challenge to N/N. 09/2023-Central Tax dated 31.03.2023 and N/N. 56/2023-Central Tax dated 28.12.2023 extending the period of issuance of the orders u/s 73 of the CGST Act, 2017 - 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 these 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. In view of the amendments brought in, the petitioners are 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 petitioners by way of show-cause notice No. ZD181223034347J dated 20.12.2023 have 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. ZD1804240177493 dated 20.04.2024 passed by the respondent no.4. The matter now stands remanded back to the competent jurisdictional officer to pass appropriate order - Petition disposed off by way of remand.

Summary

Issues Involved:

1. Extension of time limits under Section 73 of the CGST/AGST Act, 2017 due to Covid-19 as a "force majeure" condition.
2. Validity of notifications extending the limitation period for issuance of orders under Section 73.
3. Amendments to Section 16 of the CGST Act, 2017 and their retrospective effect.
4. Entitlement to Input Tax Credit (ITC) in light of recent amendments.

Issue-wise Detailed Analysis:

1. Extension of Time Limits under Section 73 Due to Covid-19:

The petitioners challenged the extension of time limits under Section 73 of the CGST/AGST Act, 2017, arguing that the Covid-19 pandemic ended in 2022, and thus, there was no justification for extending the due dates up to 31.12.2023. The extensions were invoked under Section 168A of the CGST Act, citing Covid-19 as a "force majeure" condition. The petitioners contended that the pandemic did not persist beyond 2022, questioning the bona fides of the extensions.

2. Validity of Notifications Extending Limitation Period:

The petitioners contested the validity of Notification No. 09/2023-Central Tax and Notification No. 56/2023-Central Tax, which extended the period for issuance of orders under Section 73. They argued that these extensions were not justified as the Covid-19 situation had subsided by 2022, and no other reasons were provided for the extensions. The court allowed the respondents to address these grievances and sought further instructions from the government.

3. Amendments to Section 16 of the CGST Act, 2017:

The GST Council decided that amendments were necessary to the CGST and AGST Acts, leading to changes in Section 16 through the Finance (No. 2) Act, 2024. The amendments, effective from 27.09.2024, included provisions allowing registered persons to claim ITC for financial years 2017-18 to 2020-21 in returns filed up to 30th November 2021. These changes rendered the petitioners' challenge redundant as they were now entitled to claim ITC for the relevant period.

4. Entitlement to Input Tax Credit (ITC):

The court noted that the amendments to Section 16, effective retrospectively from 01.07.2017, allowed the petitioners to claim ITC subject to the conditions in the newly inserted subsections 16(5) and 16(6). The amendments addressed the petitioners' concerns, rendering the proceedings initiated against them redundant. Consequently, the court set aside the impugned order and remanded the matter to the competent jurisdictional officer for further action if necessary.

Conclusion:

In light of the amendments, the court found that the petitioners were entitled to claim ITC, and the proceedings against them were rendered redundant. The court disposed of the writ petition, setting aside the impugned order and remanding the matter for appropriate action.