Denial of ITC for FY 2018-19 Is Unsustainable Where GST Return Was Filed Before November 30, 2021 Under Section 16(5)

By | August 21, 2026
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Denial of ITC for FY 2018-19 Is Unsustainable Where GST Return Was Filed Before November 30, 2021 Under Section 16(5)

Denial of ITC for FY 2018-19 Is Unsustainable Where GST Return Was Filed Before November 30, 2021 Under Section 16(5)
Issue
Whether Input Tax Credit (ITC) for FY 2018-19 can be denied under Section 16(4) when the GST return was filed on October 23, 2019, in light of the retrospective relief provided under the newly inserted Section 16(5) of the CGST/AGST Act, 2017.
Facts
  • Return Filing: The petitioner filed the GST return under Section 39 for FY 2018-19 on October 23, 2019, and claimed Input Tax Credit (ITC).
  • Adverse Order: The Assistant Commissioner, GST, Guwahati Division-I, passed an Order-in-Original dated March 13, 2024, denying the claimed ITC.
  • Legal Challenge: The petitioner filed a writ petition challenging the denial, relying on the newly inserted Section 16(5) of the CGST/AGST Act, 2017.
  • Statutory Threshold: Section 16(5) provides an overriding benefit for FYs 2017-18 through 2020-21, allowing ITC provided the relevant return under Section 39 was filed on or before November 30, 2021.
Decision
  • Decided in favor of the assessee.
  • The High Court held that Section 16(5) operates notwithstanding Section 16(4) for financial years 2017-18 to 2020-21.
  • Since the petitioner filed the return for FY 2018-19 on October 23, 2019 (well before the statutory deadline of November 30, 2021), the benefit of ITC could not be denied.
  • The impugned Order-in-Original dated March 13, 2024, was declared unsustainable and set aside.
KeyTakeaways
  • Overriding Effect of Section 16(5): Section 16(5) acts as a non-obstante clause over Section 16(4), extending the entitlement to ITC for FYs 2017-18 to 2020-21 for returns filed up to November 30, 2021.
  • Retrospective Relief: Orders denying ITC on time-bar grounds under Section 16(4) for the covered financial years become invalid if the filing falls within the extended deadline under Section 16(5).
  • Quashing of Order-in-Original: Adjudication orders passed contrary to statutory relief introduced by Section 16(5) are liable to be set aside by the High Court.
HIGH COURT OF GAUHATI
Rajib Agarwala
v.
Union of India
DEVASHIS BARUAH, J.
WP(C) No. 2722 of 2024
AUGUST  7, 2026
D. Saraf, Adv. for the Petitioner. S. C. Keyal, Sr. Adv. and K. Jain, Adv. for the Respondent.
JUDGMENT
1. Heard Mr. D. Saraf, the learned counsel appearing on behalf of the Petitioner and Mr. S. C. Keyal, the learned Senior counsel assisted by Mr. K. Jain, the learned counsel appearing on behalf of the Respondent Nos. 1, 3, 4, 5 & 6. None appears on behalf of the Finance and Taxation Department on call.
2. The present writ petition has been filed by the Petitioner being aggrieved by the Order-in-Original dated 13.03.2024 primarily on two grounds. The first ground is as regards the extension of the period for exercise of powers under Section 73 of the Central Goods and Services Tax Act, 2017 (for short ‘the Act of 2017’) vide Notification No.9/2023-CT dated 31.03.2023. The second ground is that the Petitioner having already submitted the return on 23.10.2019, the Petitioner should have been granted the benefit of the Input Tax Credit availed/utilized.
3. Mr. D. Saraf, the learned counsel appearing on behalf of the Petitioner submitted that taking into account the amendment of Section 16 of the Act of 2017 by the Finance Act, 2024 whereby Section 16(5) was inserted, the instant writ petition can be disposed of on the basis of Section 16(5) of the Act of 2017.
4. Taking into account the said submission, this Court finds it relevant to reproduce Sub-Section (5) of Section 16 of the Act of 2017:
“16(5). Notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed up to the thirtieth day of November, 2021.”
5. A perusal of the above quoted Sub-Section would show that notwithstanding anything contained in Sub-Section (4) in respect of an invoice or debit note for supply goods or services or both pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take Input Tax Credit in any return under Section 39 which is filed up to 30.11.2021.
6. In the instant case, from a perusal of the Order-in-Original dated 13.03.2024, it is apparent that the Petitioner has submitted the return on 23.10.2019 for the Financial Year 2018-19. Under such circumstances, it is therefore the opinion of this Court that the benefit of the ITC claimed amounting Rs.84,58,480/- cannot be denied in view of Section 16(5) of the Act of 2017. In that view of the matter, the impugned Order-in-Original dated 13.03.2024 is required to be interfered with.
7. Accordingly, the instant writ petition stands disposed of with the following observations and directions:
(i) The impugned Order-in-Original dated 13.03.2024 passed by the Assistant Commissioner, Goods and Services Tax, Guwahati Division-I stands set aside and quashed.
(ii) Interim order passed earlier stands vacated.
(iii) No costs.