GST ITC Can’t Be Denied Due to Delay After Law Extended Time Limit: Gauhati High Court

The Gauhati High Court has held that the Input Tax Credit (ITC) cannot be denied due to delay after law extended the time limit. The bench of Justice Anjan Moni Kalita has observed that notwithstanding anything contained in Section 16(4) CGST Act, 2017, in respect of any invoice or debit note for the 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 ITC in any return under Section 39, which is filed up to the 30th November, 2021. Section 16(4) of the CGST Act, 2017 lays down the time limit for availing Input Tax Credit (ITC). It provides that a registered person is not entitled to claim ITC in respect of any invoice or debit note after the 30th November following the end of the financial year to which such invoice pertains, or the date of furnishing of the relevant annual return, whichever is earlier. Thus, the provision imposes a strict outer time limit for availing ITC. However, a specific relaxation was granted for the financial year 2017–18, allowing taxpayers to claim ITC up to the due date of filing the return for March 2019, subject to the condition that the supplier had uploaded the relevant details. Subsequently, through amendment, sub-section (5) was inserted to provide a one-time relaxation overriding the limitation prescribed under Section 16(4). This provision allowed registered persons to avail ITC in respect of invoices or debit notes pertaining to the financial years 2017–18, 2018–19, 2019–20, and 2020–21 in any return filed up to 30th November 2021. The intent behind this amendment was to grant relief to taxpayers who could not avail ITC within the originally prescribed time limits. Further, sub-section (6) addresses situations where the registration of a taxpayer is cancelled and subsequently restored. It provides that where cancellation is revoked—either by the proper officer or pursuant to an appellate or judicial order—the taxpayer would be entitled to claim ITC in respect of invoices or debit notes, provided such credit was not already time-barred under Section 16(4) on the date of cancellation. The provision allows ITC to be claimed either within the general time limit (i.e., up to 30th November following the relevant financial year or the date of filing the annual return, whichever is earlier) or for the period between cancellation and revocation, provided the return for such period is filed within 30 days from the date of revocation of cancellation. Background The tax department had issued a notice alleging that the petitioner wrongly claimed ITC of Rs. 2.38 lakh for the financial year 2018–19 beyond the time limit prescribed under Section 16(4) of the CGST Act. Based on this, a demand along with interest and penalty was confirmed in February 2024. During the pendency of the dispute, the law was amended by inserting sub-sections (5) and (6) to Section 16. These amendments allowed taxpayers to claim ITC for earlier financial years (2017–18 to 2020–21) up to November 30, 2021. The High Court observed that due to this amendment, the very basis of the tax demand no longer survived. Since the law now permits ITC claims within the extended timeline, denying such credit on the earlier deadline would be unjustified. The Court disposed of the petition by setting aside the earlier tax demand order, and directing the petitioner to pay only Rs. 10,214 (excess ITC used) and Rs. 553 as interest. Case Details Case Title: Saurabh Agarwalla Versus UOI Citation: JURISHOUR-628-HC-2026(GAU) Case No.: WP(C)/1733/2026 Date: 06-04-2026 Counsel For Petitioner: R S Mishra, Ms. B Sarma, Ms. M Dey Counsel For Respondent: DY.S.G.I., SC, GST Click Here To Read Order Read More: Forensic Examination of Disputed Signatures Denied in Cheque Bounce Case: Delhi High Court Upholds Rejection Over Delay and Lack of Formal Application

GST ITC Can’t Be Denied Due to Delay After Law Extended Time Limit: Gauhati High Court

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