2025 (3) TMI 247 - HC - GST

Challenge to assessment order - reversal of ITC claim - 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 High Court of Madras considered a Writ petition filed by a taxpayer challenging the orders passed by the tax department reversing their Input Tax Credit (ITC) claim under the Goods and Service Tax Act, 2017 (GST Act)/ Central Goods and Services Tax Act. The issue revolved around the reversal of ITC and the direction to pay tax/penalty/interest. The Court noted that the issue had been addressed in a previous common order of the Court, where it was held that the petitioners, who faced difficulties in filing returns due to various reasons, were entitled to avail ITC within the extended deadline granted by the GST Council.The Court referred to the amendments made to Section 16 of the CGST Act, particularly the insertion of sub-section (5), allowing registered persons to avail ITC for certain financial years until November 30, 2021. Considering these developments, the Court concluded that the impugned orders reversing ITC claims were no longer sustainable and should be quashed. The Court directed the tax department to release frozen bank accounts of the petitioners, refrain from initiating proceedings based on limitation issues, and refund any tax amounts collected based on the impugned orders.Furthermore, the Court granted liberty to the tax department to proceed against the petitioners for other issues such as discrepancies in ITC claims. The Writ petition was allowed, and no costs were imposed.In summary, the Court held that the petitioners were entitled to avail ITC within the extended deadline provided by the GST Council, and the impugned orders reversing ITC claims were quashed. The tax department was directed to take necessary steps to release frozen bank accounts and refund any collected tax amounts. The Court granted liberty to the tax department to proceed on other issues and closed the connected Miscellaneous Petitions.