M/S Mohan Kedia And Sons vs. The Union Of INDIA

The present writ application has been filed for quashing the order, dated 16.07.2025, passed by the Appellate Authority-Additional Commissioner of State Tax (Appeal), Tirhut Division, Muzaffarpur, whereby the rectification 2/5 application preferred by the petitioner has been rejected.

Learned counsel for the petitioner submits that the petitioner is a firm engaged in the business of tyres and batteries and use to import the same from another States and sell the same within and outside the State of Bihar. The petitioner was registered under the provisions of the Central Goods and Services Tax Act, 2017, and was issued a registration certificate on 20.09.2017, bearing Registration No. 10ALQPR4347E1Z4. 3. For the financial year 2018–19, the petitioner filed its return in Form GSTR-3B on 15.12.2019 and accordingly deposited the admissible tax before the respondent and also claimed Input Tax Credit.

Since, the provisions under Section 16(4) of the Bihar Goods and Services Tax Act, 2017 were applicable, as such, the petitioner was not granted the Input Tax Credit claim. Subsequently, an amendment was made in Section 16, and sub- section (5) was inserted in Section 16 on 16.08.2024 with effect from 01.07.2017, whereby the registered person was permitted to avail Input Tax Credit in any return filed on or before 30th November, 2021. 5. The Government of India, Ministry of Finance, issued a notification/circular on 08.10.2024 for making the 3/5 provisions of Section 16(5) operational, under which the rectification of an order rejecting Input Tax Credit was required to be filed within six months from the date of coming into force of the notification dated 08.10.2024. 6. In pursuance of the aforesaid notification, the petitioner filed a rectification application before the Assessing Authority within six months, on 28.03.2025. The said application was disposed of by the Assessing Authority on 26.06.2025, rejecting the petitioner's rectification application on the ground that after filing the rectification application before the Assessing Authority, the petitioner had already filed another rectification application on 05.05.2025 before the Appellate Authority, which was the appropriate authority in the present case. The Appellate Authority rejected the petitioner's rectification application on the ground that the same has been filed after the expiry of the period of six months.

Learned counsel further submits that the petitioner, due to wrong advice and a misunderstanding, filed an application before the Assessing Authority for rectification of the order rejecting the claim of Input Tax Credit. However, the Appellate Authority failed to appreciate that the petitioner has acted diligently in taking steps as per the notification/circular, 4/5 dated 08.10.2024. Therefore, the submission is that due to wrong advice, the petitioner approached the incorrect forum and the delay in filing the rectification application before the Appellate Authority was not deliberate.

Mr. Vivek Prasad, learned counsel for the State, submits that, as per Clause 3.5 of the Circular dated 15.10.2024, the petitioner was required to submit the rectification application before the proper authority i.e. the Appellate Authority, within a period of six months. However, the petitioner failed to file the rectification application before the Appellate Authority within the prescribed period.

Having heard learned counsel for the parties and taking into consideration the fact that the petitioner filed the application for rectification of the order rejecting the claim of Input Tax Credit before the Assessing Authority, instead of the Appellate Authority, under wrong advice, and within the prescribed period, we are of the opinion that the Appellate Authority failed to appreciate this aspect of the matter that the petitioner acted diligently and his conduct was bona fide.

The Appellate Authority failed to appreciate the fact that the petitioner had already filed the rectification application before the Assessing Authority within time and upon 5/5 realizing his mistake, during the pendency of the rectification application before the Assessing Authority, he filed another rectification application before the Appellate Authority. The conduct of the petitioner was bona fide and the Appellate Authority ought to have called the rectification application from the Assessing Authority and considered the same.

Accordingly, the orders passed by the Appellate Authority as well as the Assessing Authority are set aside. The matter is remanded back to the Appellate Authority to decide the rectification application of the petitioner on its own merits, in accordance with law, without adverting to the issue of delay after giving an opportunity of hearing to the petitioner.