Input tax credit claimed within Section 16(5) cut-off cannot be denied as time-barred under Section 16(4).

By | August 18, 2026
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Input tax credit claimed within Section 16(5) cut-off cannot be denied as time-barred under Section 16(4).

Input tax credit claimed within Section 16(5) cut-off cannot be denied as time-barred under Section 16(4).

Issue

Whether Input Tax Credit (ITC) for the periods February 2020 and March 2020 can be denied as time-barred under Section 16(4) when the returns were filed within the extended cut-off date of 30.11.2021 prescribed under Section 16(5).

Facts

  • ITC Claim & Return Filing: The petitioner, a registered person under GST, claimed Input Tax Credit (ITC) for the tax periods February 2020 and March 2020.
  • Filing Dates: The GST returns for February 2020 and March 2020 were furnished on 06.11.2020 and 14.11.2020, respectively.
  • Extended Statutory Cut-Off: Under Section 16(5) of the GST Act, the statutory cut-off date for claiming ITC for the relevant period stood extended to 30.11.2021.
  • Denial by Revenue: The Adjudicating Authority passed an Order-in-Original (Ext.P2) under Section 73 denying the ITC, holding the claim to be time-barred under Section 16(4).
  • Writ Challenge: The petitioner filed a writ petition before the High Court challenging the Order-in-Original that denied the ITC claim.

Decision

  • In Favor of Assessee / Remanded: The High Court ruled in favor of the petitioner and set aside the impugned order.
  • Filing Within Cut-Off Period: The court observed that the returns for both months were furnished well before the extended cut-off date of 30.11.2021 as contemplated under Section 16(5).
  • Order Quashed: The court held that the denial of ITC based on the time-bar under Section 16(4) was unsustainable in law and quashed the Order-in-Original (Ext.P2).
  • Direction to Reconsider: The matter was remanded to the assessing authority with directions to reconsider and grant the ITC in light of Section 16(5), provided the petitioner is otherwise eligible.

Key Takeaways

  • Overriding Effect of Section 16(5): ITC claims filed within the extended deadline of 30.11.2021 under Section 16(5) cannot be rejected by applying the standard limitation under Section 16(4).
  • Protection for Delayed Returns: Where returns for FY 2019-20 and FY 2020-21 were filed within the statutory relief window provided under Section 16(5), the entitlement to ITC is preserved.
  • Arbitrary Disallowance Invalid: Demand orders under Section 73 disallowing ITC by ignoring beneficial statutory provisions like Section 16(5) are legally unsustainable and liable to be quashed.
HIGH COURT OF KERALA
Rakesh Krishnan
v.
Deputy State Tax Officer
ZIYAD RAHMAN A.A., J.
WP(C) NO. 26879 OF 2026
AUGUST  6, 2026
Rajesh Nambiar, Adv. for the Petitioner. V. Girish Kumar, SC and Gireesh G., Sr. Govt. Pleader for the Respondent.
JUDGMENT
1. The petitioner is a registered tax payer under the provisions of the CGST and SGST Act. The grievance of the petitioner is against Ext.P2 Order-in-Original, passed under Section 73 of the SGST Act, by which the Input Tax Credit claimed by the petitioner for the months of February, 2020 and March, 2020 were declined on the reason that the petitioner failed to submit the return within the period stipulated under Section 16(4) of the CGST Act.
2. The case of the petitioner is that, he is entitled to get the benefit of input tax credit in the light of Section 16(5) of the CGST Act, as the petitioner had already submitted the return before the cut off date under the said provision, which is 30.11.2021.
3. In this case, it is discernible from Ext.P2 that the petitioner had submitted the returns for the month of February, 2020 and March, 2020 within the cut off date, i.e., on 06.11.2020 and 14.11.2020 respectively. Therefore, I find merits in the submission made by the learned counsel for the petitioner, as the petitioner had submitted the return within the cut off date.
4. In such circumstances, this writ petition is disposed of quashing Ext.P2 with a direction to the competent officer to reconsider the matter and grant the benefit of Input Tax Credit to the petitioner in the light of Section 16(5), if the petitioner is otherwise eligible.