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 Order-in-Original dated 26.04.2024 and a Summary of Order in Form GST DRC-07 dated 03.05.2024, passed by the Assistant Commissioner of Central Taxes. The petitioner had availed Input Tax Credit (ITC) of Rs. 54,44,213/-. The revenue alleged that this ITC was irregularly availed 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 for Financial Year 2018-19 was 20.10.2019, which the petitioner exceeded by availing it on 31.10.2019. The petitioner did not submit a reply or attend the personal hearing, leading to the impugned order directing recovery of the ITC. The petitioner is aggrieved by this order.

Held

The Court held that it is not in dispute that the introduction of Section 16(5) of the GST Act allows assessees to avail Input Tax Credit in any return under Section 39, if filed on or before 30.11.2021. The Court found that the petitioner had availed ITC for Financial Year 2018-19 on 31.10.2019, which was beyond the cut-off date prior to the introduction of Section 16(5). However, the Court found the arguments advanced by the Department with reference to Notification dated 08.10.2024 to be without merit. The Court reasoned that Section 16(5) of the Act is clear and does not stipulate any time limit for availing ITC, as long as the return under Section 39 is filed up to 30.11.2021. Therefore, the Court was inclined to set aside the impugned order dated 26.04.2024, as the time limit for availing Input Tax Credit was effectively extended to 30.11.2021 by Section 16(5). 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 31.10.2019 for Financial Year 2018-19, which is beyond the prescribed due date of 20.10.2019 under Section 16(4) of the GST Act, is permissible in light of the introduction of Section 16(5) of the GST Act. Petitioner's contention: The petitioner argued that the insertion of Section 16(5) of the GST Act allows registered persons to take Input Tax Credit in any return filed under Section 39, if filed up to 30.11.2021, in relation to Financial Years 2017-18 to 2020-21. Therefore, the petitioner contended that there is no restriction on availing the ITC as it was before 30.11.2021. Revenue's contention: The respondents argued 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 further argued that as the petitioner did not follow the stipulated timeline, they are not entitled to any relief.