Happy Unicorn Creative Communications Private Limited Vs Superintendent of GST and Central Excise (Madras High Court)
The Madras High Court disposed of two writ petitions concerning Input Tax Credit (ITC) claimed for tax periods 2018-19 and 2019-20. In W.P.No.14839 of 2026, the petitioner challenged Order-in-Original No.01/2024-25-GST (Supdt) dated 22.04.2024, passed pursuant to Show Cause Notice No.14/2023 dated 19.10.2023 alleging belated availment of ITC beyond the limitation under Section 16(4) of the respective GST enactments. The petitioner had submitted its reply on 05.02.2024.
Subsequently, Sections 16(5) and 16(6) were inserted through the Finance (No.2) Act, 2024 dated 16.08.2024, with effect from 27.09.2024 and retrospective effect from 01.07.2017. To implement the statutory intervention, the Central Government issued CBIC Notification No.22/2024 dated 08.10.2024 under Section 148. The Notification permitted eligible taxpayers to electronically seek rectification of specified orders confirming demands for wrong availment of ITC due to contravention of Section 16(4), where ITC became available under Sections 16(5) or 16(6), subject to filing within six months from issuance of the Notification and where appeal against the order had not been filed.
The petitioner filed its rectification application on 24.11.2025, after the six-month period had expired on 07.02.2025. The application was consequently rejected as time-barred. The rejection order was challenged in W.P.No.14841 of 2026.
The Court observed that, prima facie, the petitioner had availed ITC beyond the cut-off under Section 16(5). However, in view of the subsequent statutory intervention under Sections 16(5) and 16(6), the substantive benefit now recognised by statute could not be denied. The Court considered the requirement to file the rectification application within the prescribed period under Notification No.22/2024 to be procedural in nature.
Referring to Oriya Chamber of Commerce Vs. State of Uttar Pradesh, the Court observed that procedural provisions are intended to advance justice and not defeat substantive rights. It therefore restored the rectification application filed on 24.11.2025 and directed the respondent to pass a fresh order on merits.
The respondent was directed to verify whether the petitioner had actually availed the ITC and complied with other statutory requirements, including Section 16(4) and Notification No.22/2024. The petitioner was also required to be given due notice before passing the fresh order. W.P.No.14839 of 2026 was dismissed in view of the order in W.P.No.14841 of 2026. No costs were awarded and connected writ miscellaneous petitions were closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
By this common order, both these writ petitions are disposed of.
2. In W.P.No.14839 of 2026, the petitioner has challenged the impugned Order-in-Original No.01/2024-25-GST (Supdt) dated 22.04.2024. The impugned order has been passed pursuant to the proposal set out in the Show Cause Notice, and the same has been confirmed after considering the petitioner’s reply dated 05.02.2024.
3. The petitioner was issued Show Cause Notice No. 14/2023 dated 19.10.2023, wherein it was alleged that Input Tax Credit had been availed belatedly for the tax periods 2018-2019 and 2019-2020, beyond the limitation prescribed under Section 16(4). Thereafter, the impugned order came to be passed on 22.04.2024. Subsequently, in the light of the statutory intervention under Sections 16(5) and 16(6) inserted vide Finance (No.2) Act, 2024 (15 of 2024), dated 16.08.2024, which came into effect from 27.09.2024 vide Notification S.O.4253 (E), with retrospective effect from 01.07.2017, Sections 16(5) and 16(6) were introduced. To implement the same, the Central Government issued CBIC Notification No.22/2024 dated 08.10.2024 under Section 148 of the respective GST enactments. As per the said Notification, an application for rectification of the assessment is to be filed within six months from the date of issuance of the notification. The relevant portion of the notification reads as follows:
“2. The said person shall file, electronically on the common portal, within a period of six months from the date of issuance of this notification, an application for rectification of an order issued under Section 73 or section 74 or Section 107 or Section 108 of the said Act, as the case may be, confirming demand for wrong availment of input tax credit, on account of contravention of provisions of sub-section (4) of Section 16 of the said Act, but where such input tax credit is now available as per the provisions of sub-section (5) or sub-section (6) of section 16 of the said Act, and where appeal against the said order has not been filed.”
4. The petitioner filed an application for rectification only on 24.11.2025. However, the last date for filing such an application had already expired on 07.02.2025, in terms of the above notifications.
5. In this background, the second mentioned order has been passed. The said order has been impugned in W.P.14841 of 2026, whereby the application filed by the petitioner on 24.11.2025, seeking rectification of the order dated 22.04.2024, has been rejected with the following observations:-
“6. In view of the forgoing, it is prima facie observed that the rectification sought by the tax payer under Notification No.22/2024 dated 08.10.2024, in respect of OIO Reference No.ZD3304242434998 dated 30.04.2024, and filed on 24.11.2025, has been submitted beyound that prescribed time limit of six months from the date of issuance of the said Notification. Accordingly, in light of the facts discussed above, the rectification application filed by the taxpayer under Section 148 of the CGST/TNGST Act, 2017 is not maintainable and is liable to be rejected as being barred by limitation.
Hence, the application filed by M/s. Happy Unicorn Creative Communication private Limited vide ARN AD331125040077J dated 24.11.2025 seeking rectification of the order is liable to be rejected in terms of Paragraph 2 of Notification No.22/2024 dated 08.10.2024, being barred by limitation. Accordingly, the said rectification application stands rejected as time-barred.”
6. It is indicated, prima facie, that the petitioner availed Input Tax Credit beyond the cut-off date prescribed under Section 16(5) of the respective GST Enactments. However, in the light of the statutory intervention under Sections 16(5) and 16(6) inserted vide Finance (No.2) Act, 2024 (15 of 2024), dated 16.08.2024, which came into effect on 27.09.2024 vide O.4253 (E), with retrospective effect from 01.07.2017, the substantive benefit available to the petitioner, which has now been statutorily recognised, cannot be denied.
7. The procedural requirement to file an application in terms of Notification No.22/2024 dated 08.10.2024 can be considered as procedural in nature. This Court has repeatedly held that procedural requirements should not stand in the way of granting substantive benefits available to an assessee.
8. In this connection, reference may be made to the decision of the Hon’ble Supreme Court in Oriya Chamber of Commerce Vs. State of Uttar Pradesh, AIR 1962 SC 1066, wherein it was held that procedural provisions are intended to advance justice and not defeat substantive rights.
9. Considering the above, this Court is inclined to restore the rectification application filed by the petitioner on 24.11.2025 and direct the respondent to pass a fresh order on merits.
10. If the petitioner is otherwise entitled to the benefit, the same shall be granted. The Respondent shall verify whether the petitioner had indeed availed the Input Tax Credit and whether the petitioner has complied with other statutory requirements, including the limitation prescribed under Section 16(4) and Notification No.22/2024 dated 08.10.2024.
11. In view of the order passed in W.P.No.14841 of 2026, no further orders are required to be passed in W.P.No.14839 of 2026. Accordingly, W.P.No.14839 of 2026 is dismissed.
12. Needless to state, before passing any such order, the Respondent shall give due notice to the Petitioner.
13. W.P.No.14841 of 2026 stands disposed of with the above observations. No costs. Connected Writ Miscellaneous Petitions are closed.
