Shree Shyam Steel vs. The Union Of INDIA And 5 Ors.

Held

The Court held that the amendments brought in by the Finance (No.2) Act, 2024, specifically the insertion of sub-sections (5) and (6) into Section 16 of the CGST Act, 2017, with retrospective effect from 01-07-2017, rendered the proceeding initiated against the petitioner redundant. The Court found that sub-section (5) of Section 16 allows a registered person to take ITC in respect of invoices pertaining to financial years 2017-18 to 2020-21 in any return filed up to 30th November 2021. Given this retrospective amendment, the petitioner is entitled to avail the benefit of ITC for the relevant period. Consequently, the impugned order dated 28-12-2023, which rejected the ITC claim, and the Demand-cum-Show Cause Notice dated 05-12-2022, were set aside. The matter was remanded back to the Assistant Commissioner for issuing a fresh Show Cause Notice and concluding the proceedings after affording the petitioner a due opportunity of hearing.

Facts

The petitioner, Shree Shyam Steel, challenged an order dated 28-12-2023 by the Assistant Commissioner, CGST, Guwahati Division-I, which rejected their claim for Input Tax Credit (ITC) amounting to Rs. 1,60,23,021/- for the financial year 2017-18. The rejection was based on the ground that the GSTR-3(B) returns for that period were filed after the due date, invoking Section 16(4) of the CGST Act, 2017. The petitioner argued that subsequent amendments to Section 16 of the CGST Act, specifically the insertion of sub-sections (5) and (6) by the Finance (No.2) Act, 2024, with retrospective effect from 01-07-2017, rendered the original rejection order invalid.

Key Issues

1. Whether the petitioner is entitled to avail Input Tax Credit (ITC) for the financial year 2017-18, notwithstanding the delayed filing of their GSTR-3(B) returns, in light of the amendments brought to Section 16 of the CGST Act, 2017 by the Finance (No.2) Act, 2024? Petitioner's Contention: The petitioner argued that the newly inserted sub-sections (5) and (6) of Section 16 of the CGST Act, 2017, which allow availment of ITC for financial years 2017-18 to 2020-21 up to 30th November 2021, and which were given retrospective effect from 01-07-2017, validate their claim for ITC. They contended that the impugned order, which rejected their claim based on the pre-amendment provisions of Section 16(4), is no longer sustainable. Revenue's Contention: The respondents, represented by the learned standing counsel, fairly submitted that in view of the amendments brought in by the Finance (No.2) Act, 2024, and Notification No. 17/2024-Central Tax dated 27-09-2024, the amendments to Section 16 have retrospective effect from 01-07-2017. They conceded that the petitioner is entitled to the benefit of ITC subject to the conditions prescribed in the newly inserted sections.