Extended Time Limit for ITC Claims Under Finance Act, 2024 Requires Reconsideration.

(Last Updated On: March 17, 2025)

Extended Time Limit for ITC Claims Under Finance Act, 2024 Requires Reconsideration.

Issue: Whether the petitioner-assessee should be granted an opportunity to respond to a show cause notice regarding delayed filing of GST returns and claiming input tax credit (ITC) for the financial year 2018-19, considering the extension of time limits under Section 118 of the Finance Act, 2024.

Facts:

The petitioner-assessee faced a delay in filing GST returns and claiming ITC for the financial year 2018-19.
A show cause notice was issued, and subsequent orders were passed.
The assessee pointed to the amendment in Section 118 of the Finance Act, 2024, which extended the time for filing GST returns and claiming ITC, along with related circulars.
The assessee requested that the impugned orders be set aside and an opportunity be given to reply to the show cause notice.

Decision:

The court noted that similar matters had been remanded to the show cause notice stage.
The court deemed it appropriate to pass a similar order in this case.
The writ petition was disposed of, effectively remanding the matter.
The ruling was in favor of the assessee.

Key Takeaways:

Amendments to the Finance Act, such as Section 118 of the Finance Act, 2024, can significantly impact the validity of prior orders.
Courts are willing to remand cases to the show cause notice stage when there are changes in the law that could affect the outcome.
The extension of time limits for claiming ITC provides assessees with an opportunity to rectify delayed filings.
Section 16 of Central Goods and Services Tax Act, 2017/Karnataka Goods and Services Tax Act, 2017, Section 118 of Finance Act, 2024, and Article 226 of the Constitution of India applied to this case.

HIGH COURT OF KARNATAKA

MMIL

Commercial Tax Officer

M.I. Arun, J.

WRIT PETITION NO. 7513 OF 2024 (T-RES)

DECEMBER 3, 2024

Sandeep Huilgol, Adv. for the Petitioner. Smt. Jyoti M. Maradi, HCGP, Smt. Priyanka S. Bhat and Jeevan J. Neeralg, Advs. for the Respondent.

ORDER

1. The petitioner is registered under the provisions of the Central Goods and Services Tax Act, 2017 and Karnataka Goods and Services Tax Act, 2017 (for short ‘the CGST/KGST Acts’). There is a delay in filing of GST returns and claiming input tax for the financial year 201819 by the petitioner. Hence the show cause notice was issued and the impugned orders came to be passed. Aggrieved by the same, present writ petition is filed.

2. During the course of arguments, learned counsel for petitioner submits that amendment has been effected to Finance Act, 2024 more particularly, Section 118, wherein, time for filing the GST returns and also claiming input tax credit has been extended and certain circulars have been issued by the State thereafter and the petitioner would be satisfied if the impugned orders are set aside and the petitioner is given an opportunity to reply to show cause notice issued. It is further submitted that Co-Ordinate Bench of this Court in similar circumstances has passed orders accordingly.

3. Learned High Court Government Pleader appearing for the State Government has no objection for the same.

4. As similar matters have been remanded to the stage of show cause notice, I am of the opinion that it would be appropriate to pass a similar order for the instant writ petition also there is no reason why the orders passed in W.P.No.6138/2020 or W.P.No.29139/2024 should not enure to the benefit of the petitioner. Hence, the following:

ORDER

(i)

The writ petition is disposed of;

(ii)

The petitioner is relegated to the stage of show cause notice dated 07.10.2023 (Annexure-B) issued by respondent No.1 and the subsequent impugned orders dated 29.04.2023 and 09.06.2023 (Annexures-A1 and A2 respectively) are hereby set aside;

(iii)

The petitioner is granted one month from today to reply to show cause notice;

(iv)

Respondents are directed to give effect to and implement the amended provisions contained in the Finance Act, 2014 and the CGST/KGST Acts and subsequent circulars that have been issued and consider the case of the petitioner in accordance with law and pass suitable orders within a period of two months thereafter.

5. In view of disposal of main petition, pending interlocutory applications, if any, stand disposed of.