ITC denial set aside as returns filed within extended cut-off date

ITC denial set aside as returns filed within extended cut-off date of November 30 2021.

Issue

Whether denial of Input Tax Credit (ITC) under Section 16 of the CGST/KSGST Act for the period June 2018 to March 2019 on the ground of belated return filing can be sustained when the returns were filed before the extended statutory cut-off date of 30.11.2021.

Facts

Period Involved: June 2018 to March 2019.
Registration & Returns: The petitioner, registered under CGST/KSGST, claimed Input Tax Credit in its monthly returns, which were furnished on 22.11.2019 and 25.11.2019.
Initial Orders: The Order-in-Original and a subsequent order denied the ITC claim citing belated filing beyond the standard limitation period, while interest for delayed filing remained unpaid.
Writ Challenge: The petitioner filed a writ petition challenging the denial orders before the High Court.
Statutory Cut-Off Provision: The statute permitted availment of ITC where returns for the relevant period were furnished on or before the extended cut-off date of 30.11.2021.

Decision

Quashing of Denial Orders: Since the petitioner’s returns were furnished on 22.11.2019 and 25.11.2019—well within the statutory extended relaxation deadline of 30.11.2021—the denial premised on belated filing was unsustainable and quashed. [Para 2] [In favour of assessee]
Entitlement to ITC: The petitioner was held entitled to ITC, subject to meeting other general eligibility conditions. [Para 2] [In favour of assessee]
Interest Concession: The petitioner conceded its liability to pay applicable statutory interest for the delayed filing of returns. [Para 2] [In favour of revenue]
Remand Direction: The tax authorities were directed to reconsider and grant the ITC in accordance with the statutory relaxation. [Para 2] [Matter remanded]

Key Takeaways

Supremacy of Extended Statutory Relaxation: Where the legislature extends the cut-off date for filing returns to claim ITC (e.g., up to 30.11.2021), any prior rejection based strictly on standard limitation periods must yield to the statutory extension.
Procedural Delay vs. Substantive Right: Delayed filing of returns does not defeat the substantive right to claim ITC if the return is submitted within the extended statutory grace period.
Severability of Interest Liability: Conceding and paying statutory interest for delayed filing ensures compliance while keeping the substantive entitlement to Input Tax Credit intact.

HIGH COURT OF KERALA

Munna Associates

State Tax Officer

ZIYAD RAHMAN A.A., J.

WP(C) NO. 30438 OF 2026

SEPTEMBER 8, 2026

Reghunathan V.G., Muhammad Ashraf Appattillath and Harindranath K.R., Advs. for the Petitioner. Smt. Sindhu Santhalingam, Sr. G.P. for the Respondent.

JUDGMENT

1. The petitioner, is a registered taxpayer under the provisions of the CGST/KSGST Act 2017. The grievance of the petitioner is against Ext.P3 Order-in-Orginal passed under Section 73 of the CGST Act, by which the Input Tax Credit claimed by the petitioner was declined on the reason that, the petitioner had submitted the monthly returns pertaining to the period from June 2018 to March 2019, after the period contemplated under Section 16(4) of the Act.

2. Apart from the above, another discrepancy noted was that, the petitioner failed to pay the interest for the belated filing of the returns. The challenge is raised mainly on the ground that the petitioner is entitled to claim Input Tax Credit in view of Section 16(5) of the CGST Act, which provided that, if the returns are furnished on or before 30.11.2021, the taxpayer would be eligible for Input Tax Credit. In this case, it is discernible from Ext.P3 order itself that, the returns for the months from June 2018 to March 2019 were submitted on 22.11.2019 and 25.11.2019. Thus, it is evident that, all the returns were submitted before the cut-off date contemplated under Section 16(5) of the Act. Therefore, the petitioner is entitled to Input Tax Credit in the light of the above. As regards the non-payment of interest for the delayed submission of the returns, the petitioner concedes, that it will pay the said amount.

In such circumstances, this writ petition is disposed of by quashing Exts.P3 and P5 to the extent that they declined Input Tax Credit on the ground that, the returns were not filed within the cut-off date contemplated under Section 16(4) of the Act, with a direction to the Assessing Authority to reconsider the matter and grant the benefit of Input Tax Credit to the petitioner in terms of Section 16(5), if the petitioner is otherwise eligible.