The Kerala High Court, in a ruling, held that input tax credit for FY 2019–20 cannot be rejected on the ground of late filing of GST returns if the return was filed before the cut-off date of 30 November 2021, as stipulated under Section 16(5) of the Central Goods and Services Tax Act (CGST).
The case has emerged after the State GST authorities passed an order u/s 73 of the CGST Act denying the claim of the applicant for ITC on the ground that the return for March 2020 was not submitted within the time specified u/s 16(4) of the Act. Recovery proceedings were initiated against the applicant based on the same order.
The counsel of the applicant said that though the return for March 2020 was submitted on 2 November 2020, the authorities incorrectly refused the credit by relying on Section 16(4). The subsequently introduced Section 16(5) of the CGST Act allows the taxpayer to claim ITC for the FY 2019-20 if the return was submitted on or before 30 November 2021.
The counsel, the applicant’s GST return was submitted before the same cut-off date, so the refusal of credit was not legal.
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The single-judge bench of Justice Ziyad Rahman A.A., after hearing both sides, stated that the impugned order itself specifies that the return for March 2020 has been submitted dated 2 November 2020. The court mentioned that Section 16(5) starts with a non-obstante clause and overrides the time limit stipulated u/s 16(4) of the GST Act.
After fulfilling the conditions u/s 16(5), the earlier limitation u/s 16(4) loses its relevance. The Court held that interference was needed in the case. The order has been quashed by the Court, denying the GST ITC along with the recovery notice issued thereafter.
It asked the related State Tax Officer to reconsider the case and provide the benefit of ITC u/s 16(5) of the CGST Act, if the applicant is otherwise qualified, post furnishing him a chance of hearing. Thereafter, the Court asked that fresh orders be passed within 3 months from the date of receipt of the judgment.
| Case Title | Philip Thomas Vs State Tax Officer |
| Case No. | WP(C) No.46773 of 2025 |
| For Petitioner | Smt K.Krishna, Shri Achyuth Menon, Shri Joy P.j., Shri. V. Harisankar, Smt Anna Anto |
| For Respondent | Smt Reshmitha R Chandran |
| Kerala High Court | Read Order |