The retrospective insertion of Section 16(5) into the CGST Act, 2017, overrides the time limit for claiming Input Tax Credit (ITC) under Section 16(4) for financial years 2017-18 to 2020-21, provided the returns are filed by November 30, 2021.

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO A) QUASH THE SHOW CAUSE NOTICE IN SCN NO.50/2023-24/CED3/SUPDT DATED 05.12.2023 ISSUED BY THE RESPONDENT WHICH IS HEREWITH ENCLOSED AS ANNEXURE - A AND ETC.

THIS PETITION COMING ON FOR FRESH MATTERS LIST, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

ORAL ORDER

Sri Aravind Chavan, learned counsel accepts notice for the respondents.

The petitioner has challenged the Order-in-Original passed by the respondent Authority at Annexure-'B' dated 22.02.2024 as well as the Show Cause Notice at Annexure-'A' dated 05.12.2023.

The petitioner submits that the appeal against such order came to be rejected on the basis of delay in terms of the Order-in-Original at Annexure-'B' without entering into the merits of the matter.

It is submitted that the order whereby delayed claim of ITC was rejected requires to be reconsidered in light of amendment made to Section 16 of the Central Goods and Services Tax Act, 2017 (for short 'CGST Act') by virtue of insertion of sub-clause (5) to Section 16, by virtue of which the assessee would be entitled to claim Input Tax Credit (ITC), if returns are filed before 30.11.2021.

It is to be noticed that the Order-in-Original at Annexure-'B' is passed on 22.02.2024 taking note of Section 16(4) of the CGST Act.

Sri Aravind Chavan, learned counsel appearing for the respondents submits that the Court may take note of the legal effect of sub-clause (5) to Section 16 inserted by way of amendment.

Perused the impugned Order-in-Original at Annexure-'B' dated 22.02.2024. It is noticed that the respondent Authority has held that the claim for ITC was delayed. The observations made at para 3.2 reads as follows:-

3.2 As per Notification No.19/2019-Central Tax dated 22-04-2019, the due date for filing the GSTR-3B return for the month of March, 2019 was extended to 23rd April, 2019 from 20th April, 2019, hence the last date for availing the ITC for the year 2017-18 is 23rd April, 2019, if the annual return for the year 2017-18 in not filed prior to 23rd April, 2019. If the annual return (GSTR-9) is filed prior to 23rd April, 2019 the last date for availing ITC will be such date on which the annual retum for 2017-18 is filed. In the present case, the GSTR-3B returns for the period 2018-2019 were filed by the noticee after 23rd April 2019 and as such the ITC amounting to Rs.509467/ (IGST:RS.2,22,879/-, CGST:Rs.1,43,294/-, SGST: Rs.1,43,294/-) availed for the said period has to be treated as ineligible ITC, as per Table below:-

It is to be noticed that amendment to Section 16(5) starts with a non-obstante clause. Section 16(5) reads as follows:-

"16. Eligibility and conditions for taking input tax credit.

(5) Nothwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed upto the thirtieth day of November, 2021."

The observations made in the order dated 11.03.2026 passed in W.P. No. 6883/2026 at paras-4 to 6 are extracted hereinbelow:-

"4. Perused the Order-in-Original and Order-in-Appeal. The only ground on which steps were taken to deny ITC claim is that it was claimed beyond the period prescribed under Section 16(4). Section 16(4) and Section 16(5) of the CGST