2024 (11) TMI 186 - 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 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 bearing C. No. IV(09)16/ N. Deblala/ SCN/ AC/ ADJ/ SIL/ 2023-24/1690 dated 17.10.2023 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 in original No. 31/GST/ AC/ SIL/ 2023-24 dated 28.03.2024 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.

Issues Involved:

1. Extension of time limits under Section 73 of the CGST/AGST Act, 2017 due to Covid-19.
2. Invocation of "force majeure" under Section 168A of the CGST Act, 2017.
3. Validity of notifications extending the period for issuance of orders under Section 73.
4. Amendments to Section 16 of the CGST Act, 2017 by the Finance (No. 2) Act, 2024.
5. Entitlement to Input Tax Credit (ITC) post amendments.

Detailed Analysis:

1. Extension of Time Limits under Section 73:

The petitioners challenged the extension of time limits under Section 73 of the CGST/AGST Act, 2017, which governs the determination of tax not paid or short paid, erroneously refunded, or input tax credit wrongly availed or utilized. The original due date for filing annual returns for the financial year 2017-18 was extended multiple times, ultimately to 30.09.2023, due to the Covid-19 pandemic. The petitioners argued that the pandemic had ended in 2022, rendering further extensions unjustified.

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

Section 168A of the CGST Act, 2017 allows for the extension of time limits under special circumstances, such as "force majeure" conditions. The government invoked this provision citing the Covid-19 pandemic as a "force majeure" event, which prevented the timely completion of actions under the Act. The petitioners contested this invocation, arguing that the pandemic no longer constituted a "force majeure" condition beyond 2022.

3. Validity of Notifications Extending Issuance Period:

The petitioners challenged the validity of notifications No. 09/2023-Central Tax and No. 56/2023-Central Tax, which extended the period for issuance of orders under Section 73. They argued that the extensions lacked bona fide justification and that the "force majeure" condition was not applicable post-2022. The court considered these arguments but noted the ongoing amendments and decisions at the governmental level.

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

The Finance (No. 2) Act, 2024 introduced amendments to Section 16 of the CGST Act, 2017, which governs the eligibility and conditions for taking input tax credit (ITC). The amendments, effective from 27.09.2024, included new sub-sections 5 and 6, allowing registered persons to claim ITC for financial years 2017-18 to 2020-21 under certain conditions. The court acknowledged these amendments, which addressed the petitioners' concerns regarding ITC entitlement.

5. Entitlement to Input Tax Credit Post Amendments:

The amendments to Section 16 clarified that registered persons could claim ITC for the specified financial years, subject to conditions in the newly inserted sub-sections. The court found that the amendments rendered the petitioners' challenge moot, as they were now entitled to the claimed ITC. Consequently, the show-cause notice and impugned order against the petitioners were deemed redundant.

Conclusion:

In light of the amendments to the CGST Act and the retrospective effect granted from 01.07.2017, the court set aside the impugned order and closed the writ petition. The matter was remanded to the competent jurisdictional officer for any necessary further action, ensuring the petitioners' entitlement to ITC under the amended provisions. The court's decision reflects the legislative changes and their impact on the petitioners' case, emphasizing the retrospective application of the amendments to resolve the dispute.

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