2024 (11) TMI 185 - 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 notices reference No. ZD18007230064969 dated 24.07.2023 and reference No. ZD1802923016975X dated 29.09.2023 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. ZD181223061367E dated 30.12.2023 passed by the respondent no.5. The matter now stands remanded back to the competent jurisdictional officer to pass appropriate order - Petition disposed off by way of remand.

Issues Involved:

1. Extension of the due date for filing annual returns under Section 73 of the CGST/AGST Act, 2017.
2. Invocation of "force majeure" under Section 168A of the CGST Act, 2017 due to the Covid-19 pandemic.
3. Legitimacy of the notifications extending the limitation period for issuing orders under Section 73.
4. Amendments to Section 16 of the CGST Act, 2017 and their impact on input tax credit claims.

Issue-wise Detailed Analysis:

1. Extension of Due Date for Filing Annual Returns:

The petitioners were required to file annual returns under Section 44 of the CGST/AGST Act, 2017, which was initially due by 31.12.2018 for the financial year 2017-18. The due date was extended multiple times, with the final extension for Assam being up to 07.02.2020. The petitioners challenged the further extension of deadlines for initiating proceedings under Section 73, arguing that the Covid-19 pandemic, which was cited as the reason for the extension, had ended by 2022, rendering the extensions unnecessary.

2. Invocation of "Force Majeure" under Section 168A:

Section 168A of the CGST Act, 2017 allows for the extension of time limits due to "force majeure" conditions. The government invoked this provision due to the Covid-19 pandemic to extend the limitation period for actions under the Act. The petitioners contested this invocation, arguing that the pandemic no longer constituted a "force majeure" condition by the time the extensions were granted, and thus, the extensions lacked a valid basis.

3. Legitimacy of Notifications Extending Limitation Period:

The petitioners challenged the validity of Notification No. 09/2023-Central Tax dated 31.03.2023, which extended the period for issuing orders under Section 73. They argued that the extension was not bona fide and lacked justification, as the pandemic situation had stabilized. The court noted that the GST Council had recommended these extensions due to difficulties faced by the authorities in completing scrutiny and issuing orders during the pandemic.

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

The Finance (No. 2) Act, 2024 introduced amendments to Section 16, allowing registered persons to claim input tax credit for financial years 2017-18 to 2020-21, even beyond the previously stipulated deadlines. The amendments, effective from 27.09.2024, addressed the petitioners' grievances by allowing them to claim input tax credit retrospectively. The court observed that these amendments rendered the petitioners' challenge moot, as they were now entitled to claim the input tax credit for the relevant period.

Conclusion:

The court concluded that the amendments to Section 16 of the CGST Act, 2017, effectively addressed the petitioners' concerns regarding input tax credit claims. Consequently, the proceedings initiated against the petitioners, based on the earlier show-cause notices, were deemed redundant. The court set aside the impugned order dated 30.12.2023 and remanded the matter to the competent jurisdictional officer for further action, if necessary. The writ petition was disposed of in light of these developments.

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