M V Power Solutions vs. The State Of Andhra Pradesh

Held

The Court held that the introduction of Section 16(5) of the GST Act is clear and removes the time limit for availing Input Tax Credit (ITC) as long as the return under Section 39 is filed on or before November 30, 2021. The petitioner had availed ITC for the financial year 2018-19 between March 4, 2020, and March 7, 2020, which falls within the extended period stipulated by Section 16(5). The Court found the arguments advanced by the Department regarding Notification dated 08.10.2024 to be without merit, as Section 16(5) itself provides the governing provision. Consequently, the impugned order dated 29.04.2024 was set aside. The Court allowed the Writ Petition, stating that the time limit for availing ITC was extended to November 30, 2021, by Section 16(5). No costs were awarded.

Facts

The petitioner, M V Power Solutions, challenged an assessment order dated 29.04.2024 passed by the Assistant Commissioner State Tax, Nandyal-11 Circle. The order directed the petitioner to pay or reverse Input Tax Credit (ITC) of Rs.1,88,891/- availed for the financial year 2018-19. The revenue contended that the ITC was irregularly availed as it was claimed between March 4, 2020, and March 7, 2020, which is beyond the due date of October 20, 2019, prescribed under Section 16(4) of the CGST Act, 2017, read with Section 20 of the IGST Act. The petitioner had not filed a reply or availed the personal hearing opportunity. The petitioner filed a writ petition seeking to declare the assessment proceedings and the subsequent inaction on their rectification request as arbitrary and illegal.

Key Issues

1. Whether the Input Tax Credit (ITC) availed by the petitioner for the financial year 2018-19 between March 4, 2020, and March 7, 2020, is permissible in light of Section 16(4) of the CGST Act, 2017, read with Section 20 of the IGST Act, 2017, which prescribes a due date of October 20, 2019, for availing such credit. Petitioner's contention: The petitioner argued that the insertion of Section 16(5) of the GST Act allows registered persons to claim ITC in any return filed under Section 39 up to November 30, 2021, for financial years 2017-18 to 2020-21. Therefore, the ITC availed before November 30, 2021, should be considered valid. Revenue's contention: The revenue opposed the petitioner's argument, citing Notification No.22/2024-Central Tax dated 08.10.2024, and contended that the petitioner is not entitled to relief as the stipulated timelines were not followed, and they did not apply for rectification within the prescribed period.