ITC Allowed Despite Delayed Returns Filed for FY 2017-18: Retrospective Amendment Provides Relief
Summary in Key Points:
- Issue: Was the restriction on availing Input Tax Credit (ITC) within a specific timeframe, imposed by Section 16(4) and Rule 61(5), valid? Was the retrospective amendment of Rule 61(5) also valid?
- Facts: The petitioner challenged Section 16(4) and Rule 61(5) as ultra vires, arguing they restrict ITC availment within a timeframe. They also challenged the retrospective amendment to Rule 61(5) (Notification No. 49/2019) declaring GSTR-3B a return under Section 39 retrospectively from July 1, 2017.
- Decision: Due to the insertion of clause (5) in Section 16 by the Finance (No. 2) Act, 2024, with effect from July 1, 2017, the court directed the respondents to allow the petitioner to take ITC for delayed returns filed for FY 2017-18. The interest and penalties levied were also directed to be refunded with 6% interest.
Important Note: This decision highlights the impact of retrospective amendments. The insertion of Section 16(5) effectively overrides the previous restrictions, allowing ITC claims even for delayed returns filed for FY 2017-18. This provides significant relief to taxpayers who may have missed the original deadlines. It also implicitly acknowledges the challenges faced by taxpayers in the initial implementation of the GST regime.
HIGH COURT OF JHARKHAND
Ram Constructions
v.
Union of India
M.S. RAMACHANDRA RAO, CJ.
and Deepak Roshan, J.
and Deepak Roshan, J.
W.P (T) No. 2148 of 2024
DECEMBER 7, 2024
Ms. Nitin Kumar Pasari and Sidhi Jalan, Advs. for the Petitioner. Ashok Kumar Yadav, Sr. S.C.-I, Anil Kumar, ASGI and Amit Kumar, Sr. S.C. CGST for the Respondent.
ORDER
1. This application has been filed seeking for the following reliefs:
a. | For issuance of an appropriate writ, order or direction, holding and declaring Section 16(4) of the Central Goods and Services Tax Act, 2017 as ultra vires, inasmuch as, it seeks to restrict the availment of Input Tax Credit, within a time frame, which is being violative of Article 14, Article 19(1)(g) and Article 300A of the Constitution of India and also being violative of the basic structure of the Goods and Services Tax Act, 2017. |
b. | For issuance of an appropriate writ, order, direction, holding and declaring the amendment carried under Rule 61(5) of the Central Goods and Services Rules, 2017 inserted vide Clause 4(a) of Notification No. 49/2019 dated 9th October, 2019 issued by Respondent No.-2 Central Board of Indirect Taxes and Customs (Annexure- 5) as ultra vires, by which GSTR-3B has been declared to be a return under Section 39 of the Central Goods and Services Act, 2017 with retrospective effect from 01.07.2017, as being wholly violative of Article 14, Article 19(1)(g) and Article 300A of the Constitution of India as it has the effect of interfering with the vested right of the petitioner to avail Input Tax Credit. |
c. | For issuance of a writ, order or direction in the nature of Prohibition, commanding the Respondents, their servants, agents and subordinates to forbear from giving any effect and acting on the basis of or in furtherance of the provisions of Section 16(4) of the Act and the rules made and notifications issued there under in any purported proceedings there under and from levying or collection of any tax on the basis thereof. |
d. | For issuance of an appropriate writ, order, direction for quashing and setting aside the order dated 31.01.2023 along with DRC-07 dated 10.10.2023 (Annexure-2). |
2. Heard both sides.
3. In view of Clause (5) of Section 16 inserted by the Finance (No.2) Act, 2024, with effect from 01.07.2017, the respondents are directed to allow the petitioner to take Input Tax Credit in respect of delayed returns filed for the Financial Year 2017-18, and the interest and penalty levied on the petitioner by the respondents shall be refunded with 6% p.a interest from the date of such collection till the date of repayment.
4. Accordingly, this writ petition stands disposed of.