Venus Infra Projects Vs Assistant Commissioner ST (Madras High Court)
The Madras High Court considered a challenge to an order dated 10.02.2025, wherein the petitioner claimed entitlement to input tax credit (ITC) under Section 16(6) of the applicable GST enactments.
The petitioner relied on the order dated 28.03.2022 cancelling its GST registration and contended that, where registration is subsequently revoked, the time limit for filing returns stands extended by 30 days from the date of revocation, thereby enabling the claim of ITC.
The Revenue submitted that Sections 16(4) to 16(6) should be read together and that the petitioner was not entitled to claim ITC.
The High Court examined Section 16(6), noting that it expressly refers to Section 16(4) and makes it a pre-condition that availment of ITC in respect of an invoice or debit note should not have been restricted under Section 16(4) on the date of cancellation of registration. The Court observed that Section 16(6) is intended to protect persons who were otherwise entitled to ITC on the date of cancellation but could not file returns during the period of cancellation, by excluding that period and granting an additional 30 days from the date of revocation to file returns.
In the present case, the Court found that the petitioner was not entitled to ITC under Section 16(4) on the date of cancellation of GST registration. Consequently, the petitioner was not eligible to claim ITC under Section 16(6). The Court declined to interfere with the impugned order and dismissed the writ petition. No order as to costs was passed, and the connected miscellaneous petitions were closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 10.02.2025 is challenged on the ground that the petitioner is entitled to input tax credit as per sub section (6) of Section 16 of applicable GST enactments.
2. Referring to the order dated 28.03.2022 cancelling the petitioner’s GST registration, learned counsel for the petitioner contends that the time limit for filing returns is extended up to 30 days from the date of revocation of cancellation in relation to persons whose registrations were cancelled.
3. In response, Ms. Amirta Poonkodi Dinakaran, learned Government Counsel (Taxes), points out that sub-sections (4) to (6) of Section 16 should be read as a whole and, if so read, the petitioner is not entitled to claim input tax credit (ITC).
4. Sub-section (6) of Section 16 is set out below:
(6) Where registration of a registered person is cancelled under section 29 and subsequently the cancellation of registration is revoked by any order, either under section 30 or pursuant to any order made by the Appellate Authority or the Appellate Tribunal or court and where availment of input tax credit in respect of an invoice or debit note was not restricted under sub-section (4) on the date of order of cancellation of registration, the said person shall be entitled to take the input tax credit in respect of such invoice or debit note for supply of goods or services or both, in a return under section 39,—
i. filed upto thirtieth day of November following the financial year to which such invoice or debit note pertains or annual return, whichever is earlier; or
ii. for the period from the date of cancellation of registration or the effective date of cancellation of registration, as the case may be, till the date of order of revocation of cancellation of registration, where such return is filed within thirty days from the date of order of revocation of cancellation of registration, whichever is later
5. As can be seen from the text of sub-section (6), express reference is made therein to sub-section (4). Specifically, sub-section (6) imposes the precondition that availment of ITC in respect of an invoice or debit note should not have been restricted under sub-section (4) on the date of the order of cancellation of registration for a person to take the benefit of Clauses (i) or (ii) of sub-section (6). The rationale underlying this provision is not difficult to discern. In cases wherein a person was entitled to ITC as on the date of cancellation of the registration, the said person should not be deprived of such benefit merely on account of being unable to file returns during the subsistence of such cancellation. Consequently, the period running from the date of cancellation to the date of revocation is excluded and the said person is granted a further 30 days from the date of revocation of cancellation to file the requisite returns and claim the benefit of ITC.
6. In the case at hand, the petitioner was not entitled to input tax credit, as per Section 16(4), on the date of cancellation of the GST registration. In view thereof, the petitioner is not eligible to make an ITC claim in terms of subsection (6) of Section 16.
7. For reasons aforesaid, no interference is warranted with the impugned order. Therefore, the writ petition is dismissed. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
