ITC Cannot Be Denied Solely for Belated Return Filing Within Section 16(5) Extended Deadline

Issue

Facts

• Period & Claims: For the tax periods of February 2020 and March 2020, the petitioner sought Input Tax Credit (ITC).
• Filing Dates: The petitioner filed GSTR-3B returns for both tax periods on November 3, 2020.
• Rejection by Revenue: The original adjudicating authority rejected the ITC claim solely on the ground that the GSTR-3B returns were filed belatedly.
• Appellate Confirmation: The appellate authority affirmed the rejection order, prompting the petitioner to challenge the appellate order via a writ petition.
• Petitioner’s Argument: The petitioner contended that the returns filed on November 3, 2020, fell within the extended statutory deadline permitted under Section 16(5).

Decision

• Within Extended Statutory Period: The recorded filing date of November 3, 2020, falls strictly within the deadline specified under Section 16(5) of the CGST/TNGST Act [In favour of assessee].
• Rejection Order Unsustainable: Rejection of ITC solely due to delayed return filing cannot be sustained when the filing complies with the extended statutory timeline under Section 16(5) [In favour of assessee].
• Order Quashed: The impugned original assessment/adjudication order was set aside [In favour of assessee].

Key Takeaways

• Relief Under Section 16(5): Retrospective extension of ITC deadlines provided under Section 16(5) overrides initial timeline disallowances for returns filed within the newly relaxed framework.
• No Rejection Solely for Delay: Where GSTR-3B returns are filed within the valid statutory window (including Section 16(5) extensions), the Revenue cannot deny ITC purely on the basis of late filing.