The Jharkhand High Court has set aside orders denying input tax credit (ITC) on delayed returns, upholding the retrospective application of clause (5) to Section 16 of the Central Goods and Services Tax (CGST) Act, 2017, as inserted by the Finance (No. 2) Act, 2024.
The bench of Chief Justice M. S. Ramachandra Rao and Justice Deepak Roshan has disposed of the writ petition challenging the rejection of ITC claims for the period from June 2018 to March 2019 due to the late filing of returns.
The petitioner had filed the returns after the due date, leading the authorities to deny the corresponding ITC based on the prevailing interpretation of Section 16.
However, the Finance (No. 2) Act, 2024 introduced clause (5) to Section 16 with retrospective effect from July 1, 2017, effectively allowing ITC even in cases where returns were filed belatedly, provided other conditions of eligibility were met. Further clarification was issued via a circular dated October 15, 2024, by the GST Policy Wing of the Central Board of Indirect Taxes and Customs (CBIC), directing field formations to honor ITC claims in line with the amended provisions.
Taking cognizance of these developments, the Jharkhand High Court observed that the orders challenged in the writ petition—ran contrary to the legislative intent and the latest policy directive. Accordingly, the Court quashed both orders and directed the department to permit the petitioner to avail input tax credits for the delayed returns concerning the aforementioned period.
Case Details
Case Title: M/s M. India Enterprises Versus Principal Commissioner,
Case No.: W.P.(T) No. 3123 of 2024
Date: 09.04.2025
Counsel For Petitioner: Deepak Kr. Sinha
Counsel For Respondent: P. A. S Pati
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