Section 16(5) ITC Rejection Quashed as Returns Were Filed Within Cut-Off Date: Kerala HC

Excel Polymers Vs State Tax Officer (Kerala High Court)

The petitioner, a registered taxpayer under the CGST/KSGST Act, challenged Ext.P7 assessment order relating to the assessment year 2018–19. Under Ext.P7, the input tax credit (ITC) claimed for the period from November 2018 to March 2019 was denied on the ground that the petitioner had failed to file the relevant returns within the cut-off date prescribed under Section 16(4) of the CGST Act.

The petitioner contended that, in view of Section 16(5) of the CGST Act, it was entitled to the claimed ITC since that provision contemplates that taxpayers who submit the relevant returns on or before 30.11.2021 are entitled to claim input tax credit. The petitioner relied on the dates of filing of the returns for the relevant months.

The High Court noted that Ext.P7 itself recorded that the returns for the months from November 2018 to March 2019 had been filed on 29.10.2019, 18.11.2019, 25.11.2019, 27.12.2019 and 04.01.2020. The Court found that all these returns had been filed within the cut-off date contemplated under Section 16(5) of the CGST Act. Consequently, the Court held that the petitioner was entitled to relief.

The writ petition was disposed of by quashing Ext.P7 to the extent that it denied input tax credit for the months from November 2018 to March 2019. The Court directed the first respondent to reconsider the matter and grant the benefit of input tax credit in the light of Section 16(5) of the CGST Act, if the petitioner is otherwise eligible.

Cases Discussed:

• Excel Polymers Vs State Tax Officer (Kerala High Court)

FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT

The petitioner, a registered tax payer under the provisions of the CGST/KSGST Act has approached this Court being aggrieved by Ext.P7 assessment order pertaining to the year 2018­19. As per the the said order the input tax credit claimed by the petitioner pertaining to the month of November 2018 to March 2019 were declined on the reason that the petitioner failed to submit the returns within the cut off date contemplated under Section 16(4) of the CGST Act. The challenge is raised on the ground that, as per Section 16(5) of the CGST Act, the petitioner is entitled to get the input tax credit, as the said provision contemplates that, in case the returns are submitted on or before 30.11.2021, the tax payer would be entitled to claim the input tax credit. It is discernible from Ext.P7 order itself that, the returns for the months from November 2018 to March 2019 were submitted on 29.10.2019, 18.11.2019, 25.11.2019, 27.12.2019 and 04.01.2020. Thus, it is evident that all the said returns were submitted within the cut off date contemplated under Section 16(5) of the CGST Act and thus, the petitioner is entitled to the relief.

Accordingly, this writ petition is disposed of quashing Ext.P7 to the extent it declines the input tax credit for the months referred to above with a direction to the 1^st respondent to reconsider the matter and to grant the benefit of input tax credit in the light of Section 16(5) of the CGST Act, if the petitioner is otherwise eligible.