Input Tax Credit Under Section 16(6) Is Unavailable If Already

Input Tax Credit Under Section 16(6) Is Unavailable If Already Time-Barred Under Section 16(4) on Cancellation Date

Issue

Whether a taxpayer whose GST registration was cancelled can claim Input Tax Credit (ITC) under Section 16(6) upon revocation of cancellation by filing pending returns within 30 days, when the underlying ITC was already time-barred under Section 16(4) prior to the date of registration cancellation.

Facts

Registration Cancellation & Revocation: The petitioner was a registered person under the GST regime whose registration was cancelled and subsequently restored via a revocation order.
Petitioner’s Claim: Following the revocation, the petitioner claimed ITC under Section 16(6), arguing that filing all pending returns within 30 days from the date of the revocation order entitled them to claim the credit regardless of the general time limits under Section 16(4).
Revenue’s Stand: The Tax Department contended that Section 16(6) cannot be read in isolation from Section 16(4); on the date of cancellation, the petitioner’s ITC was already time-barred, and Section 16(6) does not revive lapsed credits.
Evidentiary Record: The record demonstrated that the petitioner had already lost entitlement to the ITC under Section 16(4) on or before the date their registration was cancelled.

Decision

Precondition Under Section 16(6): Section 16(6) expressly references Section 16(4) and sets a mandatory precondition that the ITC in respect of an invoice or debit note must not already be restricted under Section 16(4) as of the cancellation date [Para 5].
Scope & Rationale of Section 16(6): The statutory purpose of Section 16(6) is merely to protect pre-existing, valid ITC entitlements by excluding the period between cancellation and revocation. It does not resurrect or extend credits that had already expired under Section 16(4) prior to cancellation [Para 6].
Ineligibility & Writ Dismissal: Because the petitioner lacked a valid entitlement under Section 16(4) on the date of cancellation, the benefit under Section 16(6) was unavailable. The writ petition was accordingly dismissed in favor of the Revenue [Para 7].

Key Takeaways

No Revival of Expired ITC: Section 16(6) serves as a bridge to preserve valid, unexpired credit during the period a registration remains cancelled—it does not act as a amnesty or revival mechanism for credits already barred by Section 16(4).
Harmonious Construction: Sections 16(4) and 16(6) must be read together. A prerequisite for invoking Section 16(6) upon revocation is establishing that the ITC was within the statutory limitation window on the exact date the registration was cancelled.
Strict Compliance for Post-Revocation Filings: While taxpayers are given a 30-day window post-revocation to file pending returns and claim ITC, this procedural indulgence applies exclusively to claims that were legally alive under Section 16(4) prior to the cancellation.

HIGH COURT OF MADRAS

Venus Infra Projects

Assistant Commissioner of ST

SENTHILKUMAR RAMAMOORTHY, J.

W.P. No. 21371 of 2026
W.M.P. Nos. 23137 and 23140 of 2026

JULY 9, 2026

Parthiban V for the Petitioner. Ms.Amirtha Poonkodi Dinakaran, Government Counsel (Taxes) for the Respondent.

ORDER

1. An order dated 10.02.2025 is challenged on the ground that the petitioner is entitled to input tax credit as per sub-section (6) of Section 16 of applicable GST enactments.

2. Referring to the order dated 28.03.2022 cancelling the petitioner’s GST registration, learned counsel for the petitioner contends that the time limit for filing returns is extended up to 30 days from the date of revocation of cancellation in relation to persons whose registrations were cancelled.

3. In response, Ms. Amirta Poonkodi Dinakaran, learned Government Counsel (Taxes), points out that sub-sections (4) to (6) of Section 16 should be read as a whole and, if so read, the petitioner is not entitled to claim input tax credit (ITC).

4. Sub-section (6) of Section 16 is set out below:

(6)

Where registration of a registered person is cancelled under section 29 and subsequently the cancellation of registration is revoked by any order, either under section 30 or pursuant to any order made by the Appellate Authority or the Appellate Tribunal or court and where availment of input tax credit in respect of an invoice or debit note was not restricted under sub-section (4) on the date of order of cancellation of registration, the said person shall be entitled to take the input tax credit in respect of such invoice or debit note for supply of goods or services or both, in a return under section 39,—

(i)

filed upto thirtieth day of November following the financial year to which such invoice or debit note pertains or annual return, whichever is earlier; or

(ii)

for the period from the date of cancellation of registration or the effective date of cancellation of registration, as the case may be, till the date of order of revocation of cancellation of registration, where such return is filed within thirty days from the date of order of revocation of cancellation of registration, whichever is later.

5. As can be seen from the text of sub-section (6), express reference is made therein to sub-section (4). Specifically, sub-section (6) imposes the precondition that availment of ITC in respect of an invoice or debit note should not have been restricted under sub-section (4) on the date of the order of cancellation of registration for a person to take the benefit of Clauses (i) or (ii) of sub-section (6). The rationale underlying this provision is not difficult to discern. In cases wherein a person was entitled to ITC as on the date of cancellation of the registration, the said person should not be deprived of such benefit merely on account of being unable to file returns during the subsistence of such cancellation. Consequently, the period running from the date of cancellation to the date of revocation is excluded and the said person is granted a further 30 days from the date of revocation of cancellation to file the requisite returns and claim the benefit of ITC.

6. In the case at hand, the petitioner was not entitled to input tax credit, as per Section 16(4), on the date of cancellation of the GST registration. In view thereof, the petitioner is not eligible to make an ITC claim in terms of sub-section (6) of Section 16.

7. For reasons aforesaid, no interference is warranted with the impugned order. Therefore, the writ petition is dismissed. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.