M/S Rajmal Indermal (Prop. Shri Arun Kumar Chordia) Through Its Proprietor Shri Arun Chordiya vs. Union Of INDIA

Held

The Court held that the impugned order needed to be set aside and the matter remanded back to the Superintendent, CGST & Central Excise Range-I, Division Ratlam for fresh adjudication. This decision was based on the intervening legislative change brought about by Notification No. 17/2024-Central Tax, dated 27/09/2024, which inserted Sub-section (5) into Section 118 of the Finance (No.2) Act, 2024. This amendment extended the period for registered persons to take input tax credit for invoices pertaining to financial years 2017-18, 2018-19, 2019-20, and 2020-21, provided the return under Section 39 was filed up to November 30, 2021. The Court acknowledged the respondent's submission that the matter should be remanded due to this change in circumstances. The ratio decidendi is that legislative amendments providing for extended timelines for availing input tax credit must be considered by adjudicating authorities, even if the original demand was raised prior to such amendment. The operative direction was to set aside the impugned order and remand the matter for fresh decision, without commenting on the merits of the case.

Facts

The petitioner, M/s Rajmal Indermal, challenged an Order-in-Original dated 21/08/2023, which upheld a demand and penalty. The basis for this demand was that the petitioner filed GSTR-3B returns for financial years 2017-18 to 2020-21 after the stipulated due date under Section 39 of the CGST Act. The due date was defined as the September following the financial year or the date of furnishing annual returns, whichever was earlier. The petitioner argued that a subsequent amendment, specifically Notification No. 17/2024-Central Tax dated 27/09/2024, inserted Sub-sections (5) and (6) into Section 118 of the Finance (No.2) Act, 2024, extending the period for availing input tax credit for these financial years up to November 30, 2021. The petitioner contended that their returns were filed within this extended period.

Key Issues

1. Whether the petitioner is entitled to avail input tax credit for financial years 2017-18 to 2020-21, given that their GSTR-3B returns were filed after the original due date but within the extended period provided by Notification No. 17/2024-Central Tax, dated 27/09/2024, which amended Section 118 of the Finance (No.2) Act, 2024? Petitioner's Contention: The petitioner argued that the insertion of Sub-section (5) to Section 118 of the Finance (No.2) Act, 2024, by Notification No. 17/2024-Central Tax, explicitly extends the period for taking input tax credit for financial years 2017-18, 2018-19, 2019-20, and 2020-21, up to November 30, 2021. Since their GSTR-3B returns were filed within this extended timeframe, the original demand and penalty were unsustainable and the matter should be re-examined. Revenue's Contention: The respondent conceded that in light of the change in law, the matter ought to be remanded back to the assessing authority for fresh consideration.