ITC Claim Filed for March 2020 on January 4, 2021 is Within Statutory Timelines

By | July 15, 2026
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ITC Claim Filed for March 2020 on January 4, 2021 is Within Statutory Timelines

Issue

Whether the petitioner’s Input Tax Credit (ITC) claim for March 2020 can be legally denied under Section 73 on the grounds of late filing, when the corresponding GSTR-3B return was furnished on January 4, 2021.

Facts

  • The petitioner, a registered taxpayer under the CGST/SGST Acts, claimed Input Tax Credit (ITC) for the tax period of March 2020.

  • The statutory return (GSTR-3B) for the month of March 2020 was physically filed by the petitioner on January 4, 2021.

  • The tax department issued an assessment order (Ext. P1) under Section 73, rejecting the petitioner’s ITC claim.

  • The sole ground for this rejection was that the petitioner failed to submit the return within the restrictive cut-off period contemplated under Section 64 of the Act.

  • The petitioner filed a writ petition before the High Court challenging the validity of this denial.

Decision

  • In favor of Assessee / Matter Remanded: Held that under the applicable statutory provisions of the Act, taxpayers are entitled to claim ITC if the return is furnished on or before November 30, 2021.

  • In favor of Assessee / Matter Remanded: Held that since the petitioner filed the return for March 2020 on January 4, 2021, the filing was completed well within the statutory timeline contemplated under Section 16(5).

  • In favor of Assessee / Matter Remanded: Held that the rejection basis adopted in the impugned order (Ext. P1) is legally unsustainable. The order is quashed, and the matter is remanded to the assessing authority to reconsider and grant the ITC benefits under Section 16(5) if the petitioner is otherwise eligible.

Key Takeaways

  • Compliance with Section 16(5) Timelines: ITC cannot be denied on procedural delay grounds if the underlying tax return was filed within the extended statutory deadlines provided under the Act (i.e., on or before November 30, 2021).

  • Erroneous Invocation of Section 64: The tax department cannot rely on restrictive interpretation or irrelevant provisions like Section 64 to deny substantive credit when the assessee meets the specific, overriding timeline criteria set out for credit enablement.

HIGH COURT OF KERALA
Sravana Textiles
v.
Assistant State Tax Officer
ZIYAD RAHMAN A.A., J.
WP(C) NO. 21909 OF 2026
JULY  2, 2026
Smt. G. Mini, P.J. Anilkumar, SATYAJITH K. WARRIER, P.S. Sree Prasad, Advs. and A. Kumar, Sr. Adv. for the Petitioner. Sajin Jacob Ambat, SR.G.P for the Respondent.
JUDGMENT
1. The petitioner is a registered taxpayer under the provisions of the CGST/SGST Act. The grievance of the petitioner is against Ext. P1 order passed under Section 73 of the CGST Act, by which, the input tax credit claimed by the petitioner for the month of March, 2020 was declined on the reason that, the petitioner failed to submit the returns within the cut off date contemplated under Section 64 of the CGST Act.
2. As far as, the challenge is raised mainly on the ground that, in light of the Section 65 of the Act, the petitioner is entitled to get the input tax credit in view of the fact that the said provisions specifically contemplates that, in case, the taxpayer is furnishing the return on or before 30.11.2021, such taxpayer would be entitled to get the benefit. In this case, it is discernible from Ext.P1 order itself that, the return for the month of March 2020 was filed on 04.01.2021, and thus, it is filed within the statutory period contemplated under Sec.16(5).
Accordingly, this writ petition is disposed of, quashing Ext.P1 with a direction to the 1st respondent to reconsider the matter and grant the benefits under Sec.16(5) of the CGST Act, if the petitioner is otherwise entitled to the same. Necessary orders in this regard shall be passed within a period of three months from the date of receipt of copy of this judgment, after affording an opportunity of hearing to the petitioner.