Input tax credit denial for 2018-19 is unsustainable as returns

Input tax credit denial for 2018-19 is unsustainable as returns were filed before the extended statutory cut-off.

Issue

Whether the tax department can legally deny Input Tax Credit (ITC) on the grounds of belated filing when the taxpayer furnished their monthly returns for December 2018 to March 2019 within the extended statutory cut-off date of November 30, 2021.

Facts

The petitioner is a registered taxpayer under the GST regime.
The tax department passed an order declining the petitioner’s Input Tax Credit (ITC) for the period from December 2018 to March 2019.
The denial of credit was based on two grounds: want of supporting documents and the belated filing of monthly returns.
The petitioner filed a writ petition challenging this order but chose to confine the challenge strictly to the ground of delayed returns, conceding the issue regarding document deficiency.
The petitioner’s monthly returns for the concerned period were actually filed on October 30, 2019, November 1, 2019, November 2, 2019, and November 22, 2019.
The tax department treated these filing dates as time-barred by measuring them against the original statutory cut-off date.
The petitioner argued that the filings were valid for ITC purposes because they fell well within the extended statutory cut-off date of November 30, 2021.

Decision

The writ petition is decided in favor of the assessee, and the impugned order is quashed to the extent of the ITC denial based on belated filing.
It was held that since all the relevant monthly returns were furnished before the extended statutory deadline of November 30, 2021, the department’s invocation of the time-bar provision is legally unsustainable.
The court observed that the statutory scheme explicitly protects and permits the availment of ITC where the underlying returns are completed within such extended windows.
The remaining findings of the tax department’s order were left undisturbed due to the petitioner’s concession on the documentation issue.
The matter is remanded, and the tax authority is directed to reconsider the claim and extend the credit to the petitioner, provided all other eligibility conditions are satisfied.

Key Takeaways

Binding Nature of Extended Deadlines: When the legislature or council extends a statutory cut-off date for filing returns to claim ITC, the tax department cannot ignore the extension and apply original timelines to penalize taxpayers.
Separability of Grounds: If a tax order relies on multiple independent grounds to deny a benefit, a court can choose to quash the bad legal finding (like an incorrect limitation calculation) while preserving the other undisputed factual findings (like document deficiency).
Conditional Relief on Remand: Winning a limitation argument in court does not guarantee an automatic credit refund; the taxpayer must still satisfy the factual and structural criteria of eligibility before the assessing authority.

HIGH COURT OF KERALA

Med Serve

State of Kerala

ZIYAD RAHMAN A.A., J.

WP(C) NO. 19281 OF 2026

JUNE 8, 2026

Kum.Narayani Harikrishnan, Anish P., Akhil Shaji, R.Jaikrishna, C.S. Arun Shankar and K. Suresh Chandran, Advs. for the Petitioner. Smt.Reshmitha R Chandran, Sr.G.P for the Respondent.

JUDGMENT

1. The petitioner is a registered tax payer under the provisions of CGST/KSGST Act. The challenge in this writ petition is against Ext.P1 order passed under Section 73 of the CGST Act, by which, input tax credit claimed by the petitioner was declined for two reasons. Firstly, it was found that, certain credits claimed by petitioner were not supported by proper documents and therefore, it could not be availed by the petitioner in the light of the statutory stipulations contained in Section 16(2)(c) of the CGST Act. Apart from the above, it was also found that, the monthly returns for the months of December 2018, January 2019, February 2019 and March 2019 were submitted beyond the cut off date contemplated under Section 16(4) of the Act. As far as the challenge raised against Ext.P1, on the ground of denial of Input Tax Credit under Section 16(2)(c) CGST Act is concerned, it is specifically admitted by the petitioner in the writ petition that, they are not pressing the said relief. The relief sought by the petitioner is confined to the denial of Input Tax Credit on the ground that the returns were submitted beyond the statutory period contemplated under Section 16(4). This challenge is raised by the petitioner by placing reliance upon Section 16(5) of the CGST Act, which provides that, in case the tax payer furnishes the returns within the cut off date contemplated therein, which is 30.11.2021, such tax payer would be entitled to claim Input Tax Credit. In this case, it is discernible from Ext.P1 itself that, the petitioner had submitted the monthly returns for the months referred to above on 30.10.2019, 1.11.2019, 2.11.2019 and 22.11.2019 respectively. Thus, all the said returns were submitted within the statutory period contemplated under Section 16(5) of the Act and therefore, the petitioner is entitled to the relief to that extent.

2. In such circumstances, this writ petition is disposed of quashing Ext.P1, to the extent it declined Input Tax Credit on the reason that, the petitioner had submitted the returns for the months of December 2018, January 2019, February 2019 and March 2019 beyond the statutory period contemplated under Section 16(4). The other findings in Ext.P1 are not interfered with, in view of the submission made by the learned Counsel for the petitioner as above. It is further directed that the 2^nd respondent shall reconsider the matter and grant the benefit of Input Tax Credit to the petitioner under Section 16(5) of the CGST Act, if the petitioner is otherwise entitled.