M/S Swastik Hitech Builders PVT LTD Through Its Director Raj Kumar Singh vs. Principal Commissioner Central Goods And Service Tax And Central Excise

Facts

The petitioner, M/s. Swastik Hitech Builders Pvt. Ltd., filed a writ petition before the Jharkhand High Court challenging orders passed by the Principal Commissioner and Superintendent, Central Goods and Service Tax & Central Excise. The core of the dispute pertains to the petitioner's eligibility to claim input tax credit (ITC) for the tax period of March 2020. The petitioner had filed their return for this period with a delay. The impugned orders, passed by the revenue authorities, disallowed the ITC due to the delayed filing of the return. The specific dates of the impugned orders are not explicitly mentioned in the judgment, but the writ petition was filed in 2023.

Held

The Court held that the petitioner is entitled to claim input tax credit in respect of the delayed return filed for the period March 2020. This decision was based on the insertion of clause (5) to Section 16 of the CGST Act by the Finance (No. 2) Act, 2024, which was made effective from July 1, 2017. Furthermore, the Court considered a circular dated October 15, 2024, issued by the GST Policy Wing of the Central Board of Indirect Taxes and Customs. The Court found that these subsequent legislative changes and the circular provided a basis for allowing ITC even in cases of delayed return filing. Consequently, the Court set aside the impugned orders passed by the respondents and directed them to permit the petitioner to avail the input tax credit for the specified period. The ratio decidendi is that legislative amendments and departmental circulars that liberalize the conditions for claiming ITC, particularly concerning delayed filings, should be applied retrospectively or prospectively as intended, to grant relief to taxpayers.

Key Issues

1. Whether the petitioner is entitled to claim input tax credit (ITC) for the tax period March 2020, despite filing the return beyond the prescribed due date, in light of the provisions of the CGST Act and relevant circulars? The petitioner argued that the benefit of input tax credit should be allowed, likely contending that the delay in filing the return should not lead to the forfeiture of ITC, especially considering subsequent legislative amendments and clarifications. The petitioner would have relied on the principle that the GST law aims to facilitate seamless credit flow. The respondents, the revenue authorities, contended that the ITC is linked to the timely filing of returns as stipulated by the GST law. They would have argued that failure to adhere to the statutory timelines for filing returns results in the denial of ITC, as per the original provisions of the Act and any applicable rules or notifications in force at the time of the delayed filing. The respondents' stance would be based on enforcing compliance with the procedural requirements of the GST regime.