ITC Disallowance Time-Bar Quashed as All GST Returns Were Furnished Before Mandatory November 30 Cut-off

By | September 5, 2026
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ITC Disallowance Time-Bar Quashed as All GST Returns Were Furnished Before Mandatory November 30 Cut-off
Issue
Whether input tax credit (ITC) under Section 16 of the CGST/KSGST Act can be disallowed on the ground of time limitation when all relevant GST returns for the periods December 2018 to March 2019, November 2019 to March 2020, and April 2020 to March 2021 were filed on or before November 30, 2021.
Facts
  • The petitioner is a registered tax assessee under the Central Goods and Services Tax (CGST) and Kerala Goods and Services Tax (KSGST) Acts.
  • Adjudication orders were passed disallowing the petitioner’s ITC claims for the periods December 2018 to March 2019, November 2019 to March 2020, and April 2020 to March 2021, primarily on the ground that GST returns were not filed within the prescribed time limits.
  • Other grounds raised in the original adjudication order were not pressed during the writ proceedings.
  • Records established that returns for December 2018 to March 2019 were filed between December 2019 and January 2020.
  • Returns for November 2019 to March 2020 and April 2020 to March 2021 were filed on November 29, 2021.
  • The petitioner invoked the benefit of the statutory cut-off date, arguing that all returns were furnished on or before November 30, 2021.
Decision
  • The High Court noted that all relevant GST returns for the disputed periods were furnished on or before the statutory cut-off date of November 30, 2021.
  • It was held that since returns were submitted within the prescribed statutory cut-off period, the petitioner’s entitlement to claim ITC stood fully preserved under Section 16.
  • The disallowance of ITC based on the time-bar provision was declared unsustainable, and the adjudication order was quashed to that extent.
  • The Assessing Officer was directed to grant the input tax credit in light of the statutory cut-off provisions, subject to verification of other statutory eligibility criteria.
  • The matter was decided in favor of the assessee.
Key Takeaways
  • Preservation of ITC Entitlement: Filing GST returns within the extended statutory cut-off deadline (on or before November 30, 2021) legally safeguards the assessee’s right to claim input tax credit under Section 16.
  • Invalidity of Time-Bar Disallowance: Tax authorities cannot invoke time-limit disallowance provisions if the return submission complies with the overarching statutory relaxation dates.
  • Conditional Grant: While relief from time limitation is granted upon meeting cut-off dates, actual credit allocation remains subject to satisfying other standard eligibility conditions under GST law.
HIGH COURT OF KERALA
Premier M Plex
v.
Assistant Commissioner
ZIYAD RAHMAN A.A., J.
WP(C) NO. 24788 OF 2026
JULY  21, 2026
Padmanathan K.V., R. Sreejith and Mohammed Shinaf A., Advs. for the Petitioner. V. Girishkumar, SC, Adv. for the Respondent.
JUDGMENT
1. The petitioner is a registered tax payer under the provisions of the CGST/KSGST Act. The challenge raised in this writ petition is against Ext.P3 order passed under Section 73 of the CGST Act, by which the input tax credit claimed by the petitioner for the period from December 2018 to March 2019, November 2019 to March 2020 and April 2020 to March 2021 were not filed within date stipulated under Section 16(4) of the CGST Act. Apart from the above, some other grounds are also raised in Ext.P3 order. The petitioner is aggrieved by the denial of input tax credit, under Section 16(4) of the CGST Act and as regards the other findings, the petitioner is not intending to contest. The challenge against the denial of input tax credit relying upon Section 16(4) of the CGST Act is raised, by placing reliance upon Section 16(5) of the CGST Act, which provides that, in cases where, the tax payer is furnishing the returns within cut off date contemplated therein, which is 30.11.2021, such tax payer would be entitled to input tax credit. In this case, it is discernible from the Ext.P3 order and the returns produced as Ext.P1 that, the petitioner submitted the returns for the period from December 2018 to March 2019 on 18.12.2019, 23.12.2019 and 02.01.2020. Similarly with regard to the year 201920, the petitioner furnished the returns for the month of November 2019 to March 2020 on 29.11.2021 and in respect of the assessment year 2020-21, the petitioner submitted returns for the months of April 2020 to March 2021 on 29.11.2021. Thus, it is evident that the petitioner had submitted all the returns within the cut off date contemplated under Section 16(5) of the CGST Act and therefore, they are entitled to get the benefits.
2. Accordingly, this writ petition is disposed of quashing Ext.P3, to the extent it declined the input tax credit by invoking Section 16(4) of the CGST Act, with a direction to the assessing officer to reconsider the matter, and to grant the benefit of input tax credit in the light of Section 16(5) of the CGST Act, if the petitioner is otherwise entitled. As it is reported that, as part of recovery of the amounts the bank account of the petitioner has been frozen, it ordered that, the same shall be lifted, consequent to the quashing of assessment order, in case the petitioner has remitted the amount in respect of the amount demanded in Ext.P3, except the amount imposed as tax and penalty for violating Section 16(4) of the CGST.