Input Tax Credit Entitled Under Section 16(5) as Returns Were Filed Before Cut-Off Date

By | August 13, 2026
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Input Tax Credit Entitled Under Section 16(5) as Returns Were Filed Before Cut-Off Date

Input Tax Credit Entitled Under Section 16(5) as Returns Were Filed Before Cut-Off Date

Issue

Whether the denial of Input Tax Credit (ITC) under Section 16(4) is sustainable when the petitioner submitted returns for January to March 2020 before the statutory cut-off date of 30.11.2021 prescribed under Section 16(5).

Facts

  • The petitioner submitted GSTR-3B returns for the period from January 2020 to March 2020 on 25.12.2020 and 29.12.2020.
  • On 18.06.2024, an order was passed under Section 73 declining the ITC claimed by the petitioner on the ground that the returns were not filed within the time limit stipulated under Section 16(4).
  • The Department contended that the time limit for submitting a rectification application under the CBIC Circular had already expired on 30.06.2025, disentitling the petitioner from claiming the benefit.
  • The petitioner challenged the Section 73 order, relying on Section 16(5), which allows ITC claims if returns were submitted on or before the cut-off date of 30.11.2021.

Decision

  • The High Court noted that the petitioner had submitted the returns for the period January to March 2020 on 25.12.2020 and 29.12.2020.
  • The Court held that the returns were filed well within the time limit of 30.11.2021 stipulated under Section 16(5).
  • Under such circumstances, the petitioner was held entitled to the benefit of Input Tax Credit, and the matter was resolved in favour of the assessee.

Key Takeaways

  • Overriding Benefit of Section 16(5): Section 16(5) provides a retrospective relaxation to the stringent time limits under Section 16(4) for returns filed on or before 30.11.2021.
  • Fulfillment of Statutory Timeline: Submitting returns in December 2020 for the January–March 2020 period satisfies the cut-off criteria under Section 16(5).
  • Statutory Relief Takes Precedence: Procedural time limits specified in circulars cannot override the substantive relief extended to taxpayers under statutory provisions.
HIGH COURT OF KERALA
Wild Planet Pvt. Ltd.
v.
Superintendent, Central Tax & Central Excise
ZIYAD RAHMAN A.A., J.
WP (C) NO. 7801 OF 2026
JULY  28, 2026
P. Raghunathan, Smt. M. Shylaja and Rishal K., Advs. for the Petitioner. J. Vishnu, Additional Standing Counsel for the Respondent.
JUDGMENT
1. The petitioner is aggrieved by Ext.P1 order passed under Section 73 of the CGST Act, by which, the Input Tax Credit claimed by the petitioner was declined, on the reason that, the petitioner failed to submit the returns for the months of January to March 2010, within the time stipulated under Section 16(4) of the CGST Act. The challenge is raised by the petitioner mainly relying upon Section 16(5) of the CGST Act, that provides that, in case the petitioner had submitted the returns within the cut off date contemplated therein i.e. on or before 31.11.2021, the petitioner would be entitled to claim the Input Tax Credit.
2. The learned Standing Counsel appearing for the respondents pointed out that Ext.P1 is an order passed as early as on 18.06.2024 and the time for submitting a rectification application as per the Circular issued by the Central Board of Indirect Taxes, is already expired on 30.06.2025. Therefore the petitioner cannot claim the said benefit.
3. However, after carefully going through the records, I am of the view that, merely because of the reason that the petitioner did not submit a rectification application within the time specified above, his claim need not be rejected. This is particularly because, as far as the right to claim the Input Tax Credit under Section 16(5) of the Act is concerned, it is a statutory entitlement, and it is a provision introduced retrospectively. Therefore, merely because, there occurred some delay on the part of the petitioner, that statutory benefit, which the petitioner is otherwise entitled, need not be declined. In this case, it is discernible from Ext.P3 show cause notice itself that, the petitioner had submitted the returns for the month of January to March 2020 on 25th December 2020 and 29th December 2020. Thus, the same was submitted within the time stipulated under Section 16(5) of the CGST Act. In such circumstances, the petitioner is entitled to the benefit.
Accordingly, this writ petition is disposed of, quashing Ext.P1, with a direction to the Assessing Authority to reconsider the matter and to grant the Input Tax Credit in the light of Section 16(5) of the CGST Act, if the petitioner is otherwise entitled.