Bhardwaj Construction Vs Union of India (Patna High Court)
The petitioner challenged an order passed under Section 73 of the Bihar Goods and Services Tax Act, 2017 (BGST Act), whereby input tax credit (ITC) claimed on tax invoices/debit notes was disallowed on the ground that the credit had been availed beyond the prescribed or extended period under Section 16(4) of the BGST Act.
The petitioner submitted that although the order was passed on 06.03.2020, recovery was initiated subsequently. Relying on Circular No. 237/31/2024-GST dated 15.10.2024 issued by the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing, the petitioner contended that Sections 16(5) and 16(6) of the CGST Act, inserted with effect from 01.07.2017 by Section 118 of the Finance (2) Act, 2024, retrospectively extended the time limit for availing ITC under Section 16(4) in specified cases. It was argued that the petitioner’s case fell within the retrospectively extended time limit and that the Section 73 order should be quashed with refund of the recovered amount along with statutory interest.
The State referred to Paragraph 3.5 of the same circular, which provides that where an order under Sections 73 or 74 of the CGST Act, or an appellate or revisional order under Sections 107 or 108, has confirmed demand for wrongful ITC due to contravention of Section 16(4), and no further appeal has been filed, the taxpayer may seek rectification under the special procedure prescribed under Section 148 of the CGST Act, as notified by Notification No. 22/2024-Central Tax dated 08.10.2024. The State submitted that the petitioner should pursue this statutory remedy instead of invoking writ jurisdiction. Reference was also made to Paragraphs 3.5.1 to 3.5.5 of the circular prescribing the rectification procedure.
