Input Tax Credit For March 2019 Filed Before Cutoff Cannot

Input Tax Credit For March 2019 Filed Before Cutoff Cannot Be Denied Under Section 16(4)

Issue

Whether denial of Input Tax Credit (ITC) for March 2019 under Section 16(4) is sustainable when the return was filed on 23.10.2019, falling within the extended deadline under Section 16(5).

Facts

The petitioner, a registered taxpayer, claimed Input Tax Credit (ITC) for the period of March 2019.
The Show Cause Notice (SCN) recorded that the monthly return for March 2019 was submitted on 23.10.2019.
An adjudication order was passed rejecting the ITC claim on the ground that the returns were filed beyond the prescribed time limit under Section 16(4).
The petitioner challenged this order via a writ petition, asserting entitlement under Section 16(5) as the return was filed before the cutoff date of 30.11.2021.

Decision

The High Court observed that the SCN itself confirmed the return for March 2019 was filed on 23.10.2019, which falls within the cutoff prescribed under Section 16(5).
Held that since the statutory provisions of Section 16(5) govern the entitlement, denial of ITC under Section 16(4) cannot be sustained.
The court set aside the order declining the ITC and directed the authorities to reconsider and grant the ITC for March 2019 in light of Section 16(5), provided the petitioner is otherwise eligible.

Key Takeaways

Overriding Effect of Section 16(5): ITC claims filed within the extended deadline of 30.11.2021 as per Section 16(5) cannot be rejected on the grounds of time bar under Section 16(4).
Statutory Benefit Compliance: Tax authorities must apply the beneficial provisions of Section 16(5) to returns filed within the designated relaxed window.
Quashing of Disallowance: Adjudication orders that fail to give effect to statutory cutoff extensions under Section 16(5) are legally unsustainable and subject to judicial setting aside.

HIGH COURT OF KERALA

Ichais Productions Ltd.

Assistant Commissioner

ZIYAD RAHMAN A.A., J.

WP(C) NO. 29314 OF 2026

SEPTEMBER 15, 2026

K.N. Sreekumaran and P.J. Anilkumar, Advs. for the Appellant. Dinesh Thankappan, Adv. for the Respondent.

JUDGMENT

The petitioner is a registered taxpayer under the provisions of the CGST Act. The challenge raised in this writ petition is against Ext.P2 order passed under Section 73 of the CGST Act, by which, the input tax credit claimed by the petitioner pertaining to the month of March 2019 was declined, on the reason that, the petitioner failed to submit the returns within the period specified under Section 16(4) of the CGST Act. The challenge is raised mainly on the ground that, by virtue of Section 16(5) of the CGST Act, the petitioner is entitled to get the input tax credit, as the petitioner had submitted return for the relevant month within the cutoff date contemplated under Section 16(5) of the CGST Act, which is 30.11.2021. It is discernible from Ext.P1 show cause notice itself that, the petitioner had submitted the monthly return for March 2019 on 23.10.2019 and thus, the return is submitted within the cutoff date contemplated under Section 16(5) of the CGST Act. Therefore, in the light of the statutory stipulations in Section 16(5) of the CGST Act, the petitioner is entitled to get the benefits. Therefore, an interference is required.

Accordingly, this writ petition is disposed of quashing Ext.P1, to the extent it declines the input tax credit for the month of March 2019 for non-filing the returns within the period stipulated in Section 16(4) of the CGST Act, with a direction to the assessing authority to reconsider the matter and pass an order granting the input tax credit for the month of March 2019 on the strength of Section 16(5) of the CGST Act, if the petitioner is otherwise entitled.