Input tax credit cannot be denied if returns fall within the extended Section 16(5) timeline.

By | June 5, 2026
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Input tax credit cannot be denied if returns fall within the extended Section 16(5) timeline.

Issue

Whether the tax authorities were justified in denying Input Tax Credit (ITC) for January and February 2019 under Section 16(4) on the grounds of late filing, when the returns were filed on January 11, 2020, thereby meeting the extended cut-off benefits introduced under Section 16(5) of the GST Act.

Facts

  • The Taxpayer: The petitioner is a registered dealer under the CGST and KGST Acts who claimed Input Tax Credit for the months of January 2019 and February 2019.

  • Filing Dates: According to the department’s own Show Cause Notice (SCN), the returns for these specific months were officially furnished on January 11, 2020.

  • Credit Disallowed: The Adjudicating Authority mechanically denied the entire ITC claim, anchoring its decision on the strict statutory timelines of Section 16(4) because the returns were not submitted within the original deadlines.

  • Taxpayer’s Defense: The petitioner challenged the denial, asserting that their claim was completely valid and protected under the newly introduced Section 16(5), which extended the legislative cut-off date to November 30, 2021.

Decision

  • Satisfaction of Conditions: The High Court observed from the records that since the returns were filed in January 2020, they easily satisfied the conditions required to avail the retrospective benefit of the extended timeline under Section 16(5).

  • Section 16(4) Denial Invalidated: The court ruled that any previous denial anchored strictly on the old time limits of Section 16(4) could no longer survive or be sustained in law.

  • Order Quashed and Remanded: The Order-in-Original disallowing the credit was quashed. The matter was remitted back to the authority with a directive to reconsider and grant the Input Tax Credit to the petitioner, provided they satisfy all other general eligibility criteria.

Key Takeaways

  • Supremacy of Special Extended Timelines: The introduced provisions of Section 16(5) override previous time-bar limitations under Section 16(4). If a taxpayer’s historical filings fall within the newly defined relaxed windows, the department cannot deny ITC based on older timelines.

  • Procedural Relief via Remand: When an assessment order is built upon an outdated legal interpretation of filing deadlines, courts will quash the order and send it back to the lower authorities for a fresh computation under the amended law.

HIGH COURT OF KERALA
Poothankara Anoopkumar
v.
Superintendent*
ZIYAD RAHMAN A.A., J.
WP(C) NO. 15526 OF 2026
MAY  22, 2026
Kum. Gayathri Muraleedharan, Smt. Archana B., Ajin K. Kuriakose, Smt. Sruthilakshmi Shaji and V.P. Narayanan, Advs. for the Petitioner. M. Alfred Lionel Winston, SC for the Respondent.
JUDGMENT
1. The petitioner is a registered taxpayer under the provisions of the CGST/KGST Act. The challenge raised in this writ petition is against Ext.P2 Order-in-Original passed by the 1st respondent, by which, the input tax credit claimed by the petitioner, pertaining to the months of January 2019 and February 2019 was declined, on the reason that the petitioner failed to submit the returns within the period stipulated under Section 16(4) of the CGST Act.
2. The challenge is raised by the petitioner mainly on the ground that, as per Section 16(5) of the CGST Act, the petitioner is entitled to get the input tax credit, as the petitioner had submitted the returns before the cut off date contemplated under the said provision, which is 30.11.2021. It is discernible from Ext.P1 show cause notice that, the petitioner had submitted the returns for the months of January and February 2019 on 11.01.2020, and thus, it is clear that, the petitioner had fulfilled the condition for getting the benefits of Section 16(5) of the CGST Act.
In such circumstances the petitioner is entitled to get the reliefs sought for in the writ petition. Accordingly, this writ petition is disposed of quashing Ext.P2 with a direction to the 1st respondent to reconsider the matter and grant the benefit of input tax credit, in the light of Section 16(5) of the CGST Act, if the petitioner is otherwise entitled to the same.
Category: GST