GST Section 16(5) Overrides Section 16(4) as Returns Were Filed Before Cut-Off Date: Kerala HC

We Match Vs State Tax Officer TPS (Kerala High Court)

The petitioner, a registered taxpayer under the CGST/KSGST Act, challenged an order passed under Section 73(9) of the CGST Act whereby Input Tax Credit (ITC) relating to the assessment year 2018-19 was denied. The denial was based on the finding that the petitioner had not filed monthly returns for the period April 2018 to March 2019 within the time limit prescribed under Section 16(4) of the Act.

The petitioner relied on Section 16(5) of the Act, which was introduced subsequently and provides that taxpayers who furnished returns on or before 30.11.2021 would be entitled to claim ITC. The show cause notice revealed that the petitioner had filed the returns for April 2018 to March 2019 on 27.11.2019 and 28.11.2019.

The High Court observed that the returns were filed before the cut-off date specified in Section 16(5). It further noted that Section 16(5) contains a non-obstante clause with respect to Section 16(4). Therefore, where returns are filed within the cut-off date under Section 16(5), the timeline prescribed under Section 16(4) loses significance.

Accordingly, the Court quashed the impugned order and directed the authority to reconsider the matter and grant the benefit of Section 16(5), if the petitioner was otherwise entitled.

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FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT

The petitioner, a registered taxpayer under the provisions of the CGST/KSGST Act has approached this Court being aggrieved by Ext.P2 order passed under Section 73(9) of the CGST Act. As per the said order the Input Tax Credit claimed by the petitioner pertaining to the assessment year 2018-2019 was declined on the reason that the petitioner failed to submit the monthly returns for the period from April 2018 – March 2019, within the statutory period contemplated under Section 16(4) of the Act.

2. The challenge is raised by the petitioner mainly placing reliance upon Section 16(5) of the Act, which was introduced subsequently, where it is contemplated that, in case the taxpayer is furnishing the returns on or before 30.11.2021, such taxpayer shall be entitled to get the Input Tax Credit. It is discernible from Ext.P1 show cause notice that, the petitioner had submitted the returns for the months of April 2018-March 2019 on 27.11.2019 and 28.11.2019. Thus, it is evident that the petitioner has submitted the returns before the cut off date contemplated under Section 16(5) of the Act and thus the petitioner is entitled to the benefits of the same. This is particularly because, Section 16(5) contemplates a non-obstante clause as regards Section 16(4), and hence if the taxpayer is submitting the return within the cut-off date contemplated under Section 16(5), the timeline fixed in Section 16(4) loses its significance. Therefore, the petitioner is entitled to the relief sought for.

Accordingly, this writ petition is disposed of, quashing Ext.P2 with a direction to the 1^st respondent to reconsider the matter and grant the benefit of Section 16(5) of the Act to the petitioner, if the petitioner is otherwise entitled.