Input tax credit cannot be denied under Section 16(4) when returns

Input tax credit cannot be denied under Section 16(4) when returns fall within extended cut-off.

Issue

Whether the claim of Input Tax Credit (ITC) for the period April 2018 to March 2019 can be rejected as time-barred under Section 16(4) of the CGST Act when the underlying returns were filed within the extended cut-off period contemplated under Section 168A and Section 16(5).

Facts

Taxpayer Details: The petitioner is a registered taxpayer under the Central Goods and Services Tax (CGST) Act and Kerala State Goods and Services Tax (KSGST) Act.
ITC Claim: The petitioner claimed Input Tax Credit for the financial year period spanning from April 2018 to March 2019.
Rejection by Revenue: The 4th respondent rejected the petitioner’s ITC claim via order Ext.P1, relying on the statutory time bar specified under Section 16(4) of the CGST Act.
Timeline of Returns: Records established that the GST returns for the relevant months were submitted between May 2018 and October 2019.
Statutory Extension: The petitioner asserted that the returns fell well within the extended cut-off period enabled through statutory extensions under Section 168A and the retroactive benefit of Section 16(5) of the CGST Act.

Decision

Within Extended Timeline: The returns submitted between May 2018 and October 2019 fell within the extended cut-off timeline granted under the relevant notifications and statutory amendments.
Section 16(4) Time Bar Inapplicable: Input Tax Credit could not be denied to the assessee by invoking the time bar under Section 16(4) when the returns satisfied the extended deadlines.
Order Quashed: Order Ext.P1 was set aside and quashed.
Remand for Reconsideration: The matter was remanded to the 4th respondent with a direction to reconsider and grant the Input Tax Credit under the strength of Section 16(5) of the CGST Act, provided the petitioner is otherwise eligible.

Key Takeaways

Overriding Effect of Section 168A & Section 16(5): Statutory extensions under Section 168A and the insertion of Section 16(5) relax the strict time limits of Section 16(4) for claiming ITC for specified historical periods.
Validity of Returns Filed Within Extended Time: If a taxpayer files GST returns within the extended cut-off dates notified by the government, the Revenue cannot deny ITC claims by rigidly applying the standard Section 16(4) deadline.
Conditional Benefit Grant: While relief from Section 16(4) time-bar is provided, actual ITC allowability remains subject to the taxpayer satisfying other substantive eligibility conditions under Section 16.

HIGH COURT OF KERALA

Calicut Garments & Uniforms

Union of India

ZIYAD RAHMAN A.A., J.

WP(C) NO. 17089 OF 2026

JULY 17, 2026

K.P. Abdul Azees, Smt.T.Archana and Smt. Baby Sahla B., Advs. for the Petitioner. P.M. Unni Namboodiri, CGC and V. Girishkumar, Sr. Panel Counsel for the Respondent.

JUDGMENT

1. The petitioner is a registered tax payer under the provisions of the CGST/KSGST Act. The grievance of the petitioner is against Ext.P1 order passed by the 4^th respondent, by which the input tax credit claimed by the petitioner pertaining to the months of April 2018 to March 2019 was declined on the reason that the petitioner failed to submit the returns within the periods stipulated in Section 16(4) of the CGST Act. The challenge raised against Ext.P1 is based Section 16(5) of the CGST Act, as per which, it is provided that, in cases where, the tax payer has submitted the returns within the cut off dated contemplated therein, which is 30.11.2021, such tax payer would be entitled to get the input tax credit.

2. In this case, it is discernible from the records that, the returns for the relevant months were submitted by the petitioner during the period from 24.05.2018 to 27.10.2019. Thus, all the returns have been submitted within the cut off date contemplated under the above said provision and therefore, the petitioner is entitled to get the input tax credit. In such circumstances, an interference is required.

3. Accordingly, this writ petition is disposed of quashing Ext.P1 with a direction to the 4^th respondent to reconsider the matter and to grant the benefit of input tax credit on the strength of Section 16(5) of the CGST Act, if the petitioner is otherwise entitled.