The retrospective insertion of Section 16(5) into the CGST Act, 2017, overrides the time restrictions of Section 16(4) for ITC claims pertaining to FY 2017-18 through 2020-21, provided the relevant returns were filed by November 30, 2021.

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH BY AN ORDER, WRIT, OR DIRECTION IN THE NATURE OF CERTIORARI, THE IMPUGNED ORDER-IN-ORIGINAL BEARING DIN 20240872MR00006176AB DATED 26.08.2024 PASSED BY THE RESPONDENT IN ANNEXURE A AS UNLAWFUL, ILLEGAL, ARBITRARY. AND ULTRA VIRES THE PROVISIONS OF CGST ACT, 2017, ALONG WITH ALL ATTENDANT AND CONSEQUENTIAL ACTIONS 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

The petitioner has filed the present petition calling in question the validity of the Order-in-Original at Annexure-'A' dated 26.08.2024 as also the impugned Summary of Order at Annexure-'B' dated 28.08.2024. The petitioner has also sought for a direction to the respondents to reconsider the matter.

The petitioner submits that the Adjudicating Authority has declined the claim of Input Tax Credit (ITC) as being ineligible in contravention of Section 16(4) of the Central Goods and Services Tax Act, 2017 (for short 'CGST Act').

Learned counsel for the petitioner submits that the Order-in-Original is passed on 26.08.2024, wherein the claim of ITC has been made belatedly. However, it is pointed out that subsequently by virtue of insertion of sub-clause (5) to Section 16, which has come into effect from 16.08.2024 and the said provision operates with a non obstante clause, the petitioner would be entitled for claim of ITC as long as the returns are filed before 30.11.2021.

It is to be noticed that sub-clause (5) to Section 16 has been inserted by way of an amendment. Section 16(5) reads as hereunder:-

"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."

Admittedly, the returns are filed on 28.11.2020 and relates to the period of three months from January to March 2020. In terms of Section 16(5), the petitioner would be entitled to claim ITC as long as the returns are filed within the cut-off date. In light of the undisputed facts as noticed above, the petitioner would be entitled to claim ITC.

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 Act reads as hereunder:

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

(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the [thirtieth day of November] following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier.

(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."

5. It is pertinent to note that the Central Board of Indirect Taxes and Customs vide Circular No. 237/31/2024-GST dated 15.10.2024, issued to all Principal Chief Commissioners/Chief Commissioners/ principal Commissioners/ Commissioners of Central Tax (All) and Principal Director General/Directors General (All) has cla