M/S.R K I Builders Private Limited vs. The Assistant Commissioner Of Central Taxes

Facts

The petitioner, M/s. R K I Builders Private Limited, filed a writ petition challenging an Assessment Proceedings Order-in-Original dated 30.08.2024 and a Summary of Order in Form GST DRC-07 dated 30.08.2024, passed by the Assistant Commissioner of Central Taxes. The petitioner had availed Input Tax Credit (ITC) of Rs. 1,03,08,501/-. The respondent alleged that the petitioner irregularly availed ITC in contravention of Section 16(4) of the GST Act read with Section 20 of the IGST Act, as the due date for availing ITC on invoices for Financial Year 2019-20 was 20.10.2020, which the petitioner exceeded by availing it on 21.11.2020. The petitioner did not submit a reply or attend the personal hearing. The impugned order directed the petitioner to pay or reverse the irregularly availed ITC, interest, and penalty.

Held

The Court held that it is not disputed that Section 16(5) of the GST Act allows assessees to avail Input Tax Credit (ITC) in any return under Section 39, if filed on or before 30.11.2021. The petitioner had availed ITC for Financial Year 2019-20 on 21.11.2020, which was beyond the cut-off date before the introduction of Section 16(5). However, the Court found that Section 16(5) is clear and stipulates no time limit, entitling registered persons to take ITC in any return filed up to 30.11.2021. The Court found the arguments advanced by the respondents with reference to the Notification dated 08.10.2024 to be without merit. Consequently, the Court was inclined to set aside the impugned order dated 30.08.2024 in view of the introduction of Section 16(5) of the GST Act, which extended the time limit for availing ITC to 30.11.2021. The impugned order was set aside, and the Writ Petition was allowed.

Key Issues

1. Whether the Input Tax Credit availed by the petitioner on 21.11.2020 for Financial Year 2019-20 is valid, considering the due date prescribed under Section 16(4) of the GST Act was 20.10.2020? 2. Whether the newly inserted Section 16(5) of the GST Act, which allows availing ITC in any return filed up to 30.11.2021 for Financial Years 2017-18 to 2020-21, retrospectively validates the ITC availed by the petitioner? Petitioner's Contentions: The petitioner argued that the insertion of Section 16(5) of the GST Act entitles registered persons to take ITC in respect of returns filed under Section 39 up to 30.11.2021 for Financial Years 2017-18 to 2020-21. Therefore, there is no restriction on them to avail ITC as it was availed before 30.11.2021, and the impugned order should be set aside. Respondents' Contentions: The respondents opposed the petitioner's contentions, arguing that in view of Notification No. 22/2024-Central Tax dated 08.10.2024 and the procedure laid down therein, the petitioner may apply for rectification of the assessment order within six months from the notification's issuance. They contended that since the petitioner did not follow the stipulated timeline, they are not entitled to any relief.