M/S Shri Sai Super Market, Through Its Proprietor Shri Sunil Kumar vs. Union Of INDIA Through The Secretary, Ministry Of Finance

Held

The Court held that in view of the insertion of Clause (5) of Section 16 of the CGST Act, 2017, by the Finance (No.2) Act, 2024, with effect from July 1, 2017, the respondents are directed to allow the petitioner to take Input Tax Credit in respect of the delayed returns filed for the Financial Year 2019-20. The Court reasoned that the retrospective amendment effectively regularized the delayed filing of returns for the specified period. Consequently, the interest and penalty levied on the petitioner by the respondents shall be refunded. The refund is to include an interest of 6% per annum from the date of collection of such amounts until the date of repayment. The writ petition was disposed of in terms of these directions.

Facts

The petitioner, M/s. Shri Sai Super Market, filed a writ petition challenging an Order-in-Original dated August 14, 2024, passed by the Superintendent, Central Goods and Services Tax and Central Excise, Chas. This order disallowed Input Tax Credit (ITC) amounting to Rs. 11,93,004/- for the Financial Year 2019-20, citing non-compliance with Section 16(4) of the CGST Act, 2017. The disallowance was based on the ground that the petitioner filed its monthly GSTR-3B returns after the due date. The petitioner argued that a subsequent amendment, inserting sub-section (5) into Section 16 of the CGST Act, 2017, via the Finance (No.2) Act, 2024, extended the period for filing returns under Section 39 of the CGST Act, 2017, until November 30, 2021, for Financial Years 2017-18 to 2020-21. The petitioner contended that their returns were filed within this extended period.

Key Issues

1. Whether the Input Tax Credit disallowed under Section 16(4) of the CGST Act, 2017, for the Financial Year 2019-20, should be allowed in light of the retrospective insertion of Section 16(5) of the CGST Act, 2017, by the Finance (No.2) Act, 2024? Petitioner's Arguments: The petitioner argued that the insertion of Section 16(5) of the CGST Act, 2017, by the Finance (No.2) Act, 2024, with effect from July 1, 2017, retrospectively extended the period for filing GSTR-3B returns up to November 30, 2021, for the Financial Years 2017-18 to 2020-21. They contended that since their returns for the Financial Year 2019-20 were filed within this extended period, the ITC amounting to Rs. 11,93,004/- should be allowed, and the interest and penalty levied should be set aside. They relied on the provisions of Section 16(5) of the CGST Act, 2017, as inserted by the Finance (No.2) Act, 2024. Respondents' Arguments: The respondents did not record any specific arguments against the petitioner's contentions in the provided judgment.