The Jharkhand High Court has quashed an Order-in-Original rejecting Input Tax Credit (ITC) worth Rs. 8.48 lakh on the ground of delayed filing of GSTR-3B returns and remanded the matter back to the Assessing Authority for fresh adjudication in light of the retrospective amendment introduced in Section 16(5) of the CGST Act through the Finance (No. 2) Act, 2024.
The bench of Chief Justice M. S. Sonak and Justice Rajesh Shankar has observed that though ordinarily the petitioner could have been relegated to the alternative appellate remedy available under the GST law, the subsequent legislative developments warranted judicial interference. The insertion of Section 16(5) in the CGST Act, which states that notwithstanding Section 16(4), registered persons would be entitled to claim ITC relating to FYs 2017-18 to 2020-21 in any return filed up to November 30, 2021.
The petitioner-company had challenged the Order-in-Original dated July 26, 2023, whereby the department rejected ITC amounting to ₹8,48,496 for FY 2018-19 under Section 73(9) of the CGST Act solely on the ground that GSTR-3B returns for the period July 2018 to March 2019 were filed beyond the prescribed due date under Section 16(4) of the CGST Act. Consequential interest under Section 50 and penalty under Section 122(2)(a) were also imposed.
The petitioner further sought declaration that the ITC had been validly availed in view of newly inserted Section 16(5) of the CGST Act, which retrospectively extended the time limit for availing ITC for FYs 2017-18 to 2020-21 till November 30, 2021. The company argued that since its GSTR-3B returns had been filed within the extended timeline, denial of ITC was no longer sustainable in law.
The plea also challenged the garnishee proceedings initiated through Form GST DRC-13 dated December 18, 2025, by which the department directed the petitioner’s banker, Canara Bank, to recover alleged interest and penalty amounting to ₹8,44,801 from the company’s account.
The Bench also took note of CBIC Circular No. 237/31/2024-GST dated October 15, 2024, which clarified the implementation of Sections 16(5) and 16(6) of the CGST Act.
Importantly, the Court relied upon its earlier rulings in Vinod Udaipuri v. Union of India and Manoj Kumar Singh v. Principal Commissioner, CGST & Central Excise, where similar GST adjudication orders had been set aside after considering the retrospective amendment and corresponding CBIC clarification.
Following the same approach, the High Court quashed the impugned Order-in-Original dated July 26, 2023. The Court further held that once the adjudication order itself was set aside, the garnishee proceedings initiated through DRC-13 would also automatically fail and accordingly quashed the recovery proceedings as well.
The matter has now been remanded to the Assessing Authority for fresh adjudication after considering the impact of the retrospective amendment and CBIC clarification. The Court directed the authority to complete the proceedings afresh within four months from the date of appearance of the parties.
The parties have been directed to appear before the Assessing Officer on May 18, 2026 at 11:00 AM.
The High Court also clarified that although the Order-in-Original was being set aside, no refund direction was being issued at this stage and all rights and contentions of the parties were left open for reconsideration by the Assessing Authority.
Case Details
Case Title: M/s. Emotions Transmission Pvt. Ltd. Versus Union of India
Citation: JURISHOUR-1160-HC-2026(ALL)
Case No.: W.P. (T) No. 3036 of 2026
Date: 06.05.2026
Counsel For Petitioner: Sumeet Gadodia, Advocate
Counsel For Respondent: P.A.S. Pati, Sr. S.C. (CGST)
