Rejection of ITC for belated returns is unsustainable following the statutory amendment extending time limits.

By | September 8, 2026
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Rejection of ITC for belated returns is unsustainable following the statutory amendment extending time limits.
Issue
Whether the rejection of Input Tax Credit (ITC) on the ground of belated filing of returns under Section 16(4) is sustainable after the statutory incorporation of Section 16(5) refixing the timelines for returns and ITC claims.
Facts
  • Nature of Petition: The petitioner filed a writ petition challenging a GST order that denied Input Tax Credit (ITC) solely because returns were submitted beyond the prescribed statutory timeline under Section 16(4).
  • Scope of Relief: The petition was confined specifically to the disallowance of ITC arising from such belated returns.
  • Statutory Amendment: Subsequently, Section 16(5) was incorporated into the Goods and Services Tax Act, which refixed and extended the timeline for claiming ITC with reference to the return due date.
Decision
  • Applicability of Amended Regime (In favor of Assessee): Following the insertion of Section 16(5), the time limit for claiming ITC is governed by the amended statutory regime.
  • Impugned Order Displaced: The retrospective/amended timelines displace the contrary view adopted in the impugned order, rendering the denial of ITC based strictly on the earlier Section 16(4) bar unsustainable.
  • Order Set Aside Partly: The impugned order was set aside to the extent of the ITC disallowance for belated returns, and the writ petition was disposed of accordingly.
Key Takeaways
  • Overriding Effect of Section 16(5): The insertion of Section 16(5) extends the timeline for claiming Input Tax Credit, nullifying earlier disallowances made strictly under Section 16(4) for belated filing.
  • Relief for Past Returns: Disallowances resting solely on time-bar restrictions under Section 16(4) cannot survive once the amended statutory timeline covers the period of return submission.
HIGH COURT OF MADRAS
M. Natarajan
v.
Proper Officer/Commercial Tax Officer
Senthilkumar Ramamoorthy, J.
WP No. 33196 of 2026
WMP. No. 36509 of 2026
AUGUST  28, 2026
Raveendran B. for the Petitioner. Ms. Amirta Poonkodi Dinakaran, Addl. Govt. Pleader (Tax) for the Respondent.
ORDER
1. An order dated 29.08.2024 is assailed partly only insofar as belated filing of returns under Section 16(4) of applicable GST enactments is concerned.
2. Learned counsel for the petitioner submits that the law was amended by inserting Section 16(5) re-fixing the time limits for filing returns and availing of Input Tax Credit (ITC). On account of this development, he submits that the impugned order is not sustainable.
3. Ms. Amirta Poonkodi Dinakaran, learned Additional Government Pleader (Tax), accepts notice on behalf of the respondent.
4. In view of the change in law by incorporation of Section 16(5), the impugned order is set aside partly insofar as rejection of ITC on the ground of belated filing of returns is concerned.
5. With the above observation, this writ petition is disposed of. Consequently, connected miscellaneous petition is closed. No costs.