Extended Time Limit for GSTR-3B Filing Allows ITC Claim.

Issue: Whether an Input Tax Credit (ITC) denial order, based on the assessee’s failure to file Form GSTR-3B within the originally prescribed time limit for the period 2018-19, can be sustained when the time limit has been subsequently extended under Section 16(5) of the GST Act.

Facts:

The impugned order denied ITC to the assessee due to the failure to file Form GSTR-3B within the originally prescribed time.
Subsequently, Section 16(5) extended the time limit for filing returns.
The assessee claimed to have filed returns on 26-11-2019, which now falls within the extended time limit.

Decision:

The court held that after the introduction of Section 16(5), the time limit for filing such returns was extended up to 30-11-2021.
Therefore, the impugned order could not be legally sustained.
The impugned order was set aside.
The matter was remanded to pass fresh orders.
The ruling was in favor of the assessee/matter remanded.

Key Takeaways:

Subsequent legislative changes, such as the extension of time limits under Section 16(5), can invalidate prior orders based on the original time limits.
Assessees are entitled to the benefit of ITC when they file returns within the extended time limit.
Courts can set aside orders that are no longer legally sustainable due to legislative changes.
Section 16 of Central Goods and Services Tax Act, 2017/Kerala State Goods and Services Tax Act, 2017 applied to this case.

HIGH COURT OF KERALA

Mellow Foundation Builders and Developers (P.) Ltd.

Superintendent Central Tax And Central Excise

Bechu Kurian Thomas, J.

WP(C) NO. 23524 OF 2024

JANUARY 23, 2025

P. Raghunathan, Premjit Nagendran, M. Shylaja, and Rishal. K, Advs. for the Petitioner. Vivek A.V., Adv. and P.R. Sreejith, SC for the Respondent.

JUDGMENT

1. Petitioner challenges an order dated 18.04.2024 assessing the petitioner under Section 73(9) of the CGST Act apart from penalty and interest for the financial year 2018-19.

2. Petitioner is an assessee under the GST Act. The impugned order was issued after denying the benefit of input tax credit on account of the provisions contained in sub-section (4) of Section 16 of the CGST/SGST Act, due to the failure of the petitioner to file Form GSTR-3B within the time prescribed for the year 2018-19.

3. However, subsequently, in view of Section 16(5), the time limit prescribed under Section 16(4) was extended and therefore the petitioner would now be entitled to the benefit of input tax credit which has been denied by the impugned order. Petitioner claims to have filed the returns for 11/2018 up to 03/2019 on 26.11.2019 and is now to be treated as within time.

4. I have heard Sri.Raghunathan P., the learned counsel for the petitioner and Sri.P.R.Sreejith, the learned Standing Counsel for the respondents.

5. For the months of November 2018 upto March 2019, the petitioner ought to have, as per section 16(4), filed the returns by 20-10-2019. However petitioner filed the returns GSTR-3B only on 26.11.2019. Hence the claim for input tax credit availed by the petitioner was denied and the demand and penalty were imposed on them. After the introduction of Section 16(5), the time period for filing such returns has been extended upto 30.11.2021. If the return filed by the petitioner is taken into reckoning, there could be significant change in the appreciation of facts carried out in Ext.P1. In view of the above, the impugned order cannot be legally sustained, and it is required to be re-considered.

6. Accordingly, impugned order Ext. P1 dated 18-04-2024 is set aside and the first respondent is directed to pass fresh orders, within a period of three months from the date of receipt of a certified copy of this judgment, after taking note of the provisions contained in Section 16(5) of the CGST/SGST Act and after affording an opportunity of hearing to the petitioner.

7. The writ petition is allowed as above.