AP HC Allows ITC Claim Due to Extended Time Limit Under Section 16(5)

Kameswari Agencies Vs Assistant Commissioner (Andhra Pradesh High court)

In Kameswari Agencies Vs Assistant Commissioner, the Andhra Pradesh High Court considered a writ petition challenging orders dated 29.08.2024 and 30.08.2024 rejecting the petitioner’s Input Tax Credit (ITC) claims for the period from 01.04.2019 to 31.03.2020.

The petitioner, a registered person under the GST Act, had filed ITC claims for tax periods from September 2019 to March 2020 on 26.10.2020 and 27.10.2020. The first respondent rejected the claims on the ground that the limitation period under Section 16(4) of the GST Act had expired on 25.10.2020, and therefore the claims filed after that date were time-barred.

The petitioner contended before the High Court that Section 16(5) of the GST Act, introduced with effect from 01.07.2017, extended the time limit for availing ITC relating to Financial Years 2017-18, 2018-19, 2019-20 and 2020-21 up to 30.11.2021. According to the petitioner, since the ITC claims related to the financial year 2019-20 and were filed in October 2020, the claims were well within the extended period prescribed under Section 16(5).

The High Court examined Section 16(5) and observed that it specifically allowed registered persons to avail ITC for the specified financial years in any return filed up to 30.11.2021. The Court noted that the petitioner’s claims related to the financial year 2019-20, which was covered by the provision.

Accordingly, the Court held that the petitioner had time up to 30.11.2021 to file the ITC claims and that the claims filed in the last week of October 2020 could not be rejected on the ground of delay. The High Court allowed the writ petition, set aside the impugned orders including Form GST DRC-07 dated 30.08.2024, and remanded the matter back to the first respondent for fresh consideration in accordance with the observations made by the Court.

FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT

The petitioner is a registered person under the G.S.T Act. In the course of the filing of returns etc., the petitioner sought entitlement of input tax credit for the period from 01.04.2019 to 31.03.2020, by filing claims in the following manner:

2. These claims were rejected by the 1^strespondent, by way of an Order dated 29.08.2024 and 30.08.2024. It is the contention of the first respondent that the period granted for making such claim, under Section 16(4) of the GST Act expired on 25.10.2020 and since all the claims were filed beyond 25.10.2020, the petitioner was not eligible for such a claim.

3. Agreed by this order of rejection, the petitioner has approached this Court, by way of the present Writ Petition.

4. Learned counsel for the petitioner would submit that Section 16 (5), which was incorporated with effect from 01.07.2017 extended the said period up to 30.11.2021 and as such, the rejection of the claim of the petitioner is unwarranted and is in violation of Section 16(5) of the GST Act.

5. Section 16(5) of the GST Act reads as follows:

Section 16 (5) Notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed up to the thirtieth day of November, 2021.

6. The petitioner had raised a claim for Input tax credit for the period 2019-2020. The said period is covered under Section 16(5), extracted above. Therefore, the petitioner had an extended time, up to 30.11.2021, to file the claims. As these claims were filed in the last week of October 2020, the said claims of the petitioner cannot be rejected on the ground of delayed filing.

7. Accordingly, this Writ Petition is allowed, setting aside the order in Form GST DRC-07 dated 30.08.2024 and the order dated 29.08.2024, and the matter is amended back to the 1^strespondent to take an appropriate decision, in terms of the guidelines set out above by this court. There shall be no order as to costs.

As a sequel, pending miscellaneous petitions, if any, shall stand closed.