- H. R. Constructions Vs Superintendent of Central Tax and Others (Andhra Pradesh High Court)
- Challenge to Assessment Order
- ITC Availed for Financial Year 2018-19
- Assessment Proceedings
- Section 16(5) and Extended ITC Time Limit
- Effect of Section 16(5)
- Respondents' Submission on Pending Appeal
- Petitioner's Decision to Withdraw Appeal
- Andhra Pradesh High Court's Findings
- Final Decision
H. R. Constructions Vs Superintendent of Central Tax and Others (Andhra Pradesh High Court)
Summary: The Andhra Pradesh High Court considered a challenge to an assessment order dated 18.02.2021 directing the petitioner to pay or reverse Input Tax Credit of Rs.16,34,365/- allegedly availed beyond the time prescribed under Section 16(4) of the CGST Act, 2017 read with Section 20 of the IGST Act. The petitioner had availed the ITC relating to Financial Year 2018-19 on 20.12.2019, whereas the prescribed date was 20.10.2019.
The petitioner submitted that Section 16(5), introduced subsequently, permitted ITC relating to Financial Years 2017-18 to 2020-21 where the return under Section 39 was filed up to 30.11.2021. The petitioner stated that the ITC had been availed before that extended date and sought setting aside of the assessment order. The respondents did not dispute the submission but pointed out that the petitioner had already filed an appeal pursuant to an earlier direction of the Court.
The Court noted that Section 16(5) allowed eligible ITC where the return under Section 39 was filed on or before 30.11.2021. Considering the petitioner’s submission that the appeal would be withdrawn and that the challenge to Section 16(4) and Section 20 of the IGST Act was no longer being pursued, the Court set aside the assessment order dated 18.02.2021 in view of the introduction of Section 16(5).
The writ petition was accordingly allowed without costs and pending applications, if any, were closed.
Challenge to Assessment Order
The petitioner, a registered dealer under the GST Act, had availed Input Tax Credit of Rs.16,34,365/-. The respondents treated the ITC as irregularly availed under Section 16(4) of the CGST Act read with Section 20 of the IGST Act.
The assessment order dated 18.02.2021 directed the petitioner to pay or reverse the ITC on the ground that the credit relating to Financial Year 2018-19 had been availed after the applicable statutory time limit.
ITC Availed for Financial Year 2018-19
The petitioner had availed the Input Tax Credit on 20.12.2019. The Court recorded that, under Section 16(4), the petitioner had to avail the ITC relating to Financial Year 2018-19 on or before 20.10.2019.
Accordingly, at the time relevant to the original assessment, the ITC had been availed beyond the time prescribed under Section 16(4).
Assessment Proceedings
The 1st respondent issued an intimation notice in Form GST DRC-01A dated 03.11.2020, followed by a show cause notice.
The petitioner submitted a reply dated 11.01.2021, stating that there had been a delay in receipt of payments from the Government and consequently a delay in filing GSTR-3B returns.
After considering the objections, the 1st respondent passed the impugned assessment order dated 18.02.2021 directing the petitioner to pay or reverse the Input Tax Credit treated as irregularly availed.
Section 16(5) and Extended ITC Time Limit
During the hearing, the petitioner’s counsel submitted that, following insertion of Section 16(5) of the GST Act, a registered person was entitled to take Input Tax Credit in a return filed under Section 39 up to 30.11.2021 in respect of the Financial Years 2017-18 to 2020-21.
The petitioner submitted that the ITC in the present case had been availed on 20.12.2019, which was before 30.11.2021, and therefore the introduction of Section 16(5) removed the restriction relied upon in the assessment order.
TaxGuru’s coverage of the amendment explains that CGST Section 16(5) provides the specified extended time limit for ITC relating to Financial Years 2017-18 to 2020-21.
Effect of Section 16(5)
The Court recorded that, by virtue of the introduction of Section 16(5), assessees were allowed to avail Input Tax Credit in a return under Section 39 if the return was filed on or before 30.11.2021.
In the present case, the petitioner had availed the ITC relating to Financial Year 2018-19 on 20.12.2019, which was after the original cut-off date under Section 16(4) but before the date specified in Section 16(5).
Respondents’ Submission on Pending Appeal
The counsel for the respondents did not dispute the petitioner’s submission concerning Section 16(5). However, it was submitted that, while entertaining the writ petition, the Court had by order dated 29.06.2021 directed the petitioner to file an appeal against the order under challenge.
In accordance with that direction, the petitioner had filed an appeal before the Appellate Authority, which was pending consideration. The respondents therefore submitted that, in those circumstances, the petitioner could not seek setting aside of the impugned order.
Petitioner’s Decision to Withdraw Appeal
During the hearing, the petitioner’s counsel submitted that the petitioner intended to withdraw the appeal filed before the Appellate Authority.
The petitioner also submitted that, in view of the introduction of Section 16(5), he was no longer interested in pursuing the prayer challenging the validity of Section 16(4) of the CGST and APGST Acts and Section 20 of the IGST Act.
Andhra Pradesh High Court’s Findings
The Court considered the respective submissions and noted that Section 16(5) allowed eligible taxpayers to avail Input Tax Credit in a return under Section 39 filed on or before 30.11.2021.
Although the petitioner had availed the ITC on 20.12.2019, beyond the cut-off date applicable under Section 16(4), the Court took note of the subsequent introduction of Section 16(5).
Considering the petitioner’s submissions and the extended time limit introduced by Section 16(5), the Court deemed it appropriate to set aside the impugned assessment order dated 18.02.2021.
The Court accordingly did not proceed with the petitioner’s challenge to the validity of Section 16(4) of the CGST and APGST Acts and Section 20 of the IGST Act, the petitioner having stated that he was no longer interested in pursuing that prayer.
Final Decision
The Andhra Pradesh High Court set aside the impugned assessment order dated 18.02.2021 in view of the introduction of Section 16(5) of the GST Act, which extended the relevant time limit for availing Input Tax Credit to 30.11.2021.
The writ petition was allowed and there was no order as to costs.
As a sequel, pending applications, if any, were directed to stand closed.
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
1. The present writ petition is filed seeking to declare Section 16(4) of CGST Act, 2017 as well as Section 16(4) of APGST Act and Section 20 of IGST Act as contrary to non-obstante clause contained in Section 62 of CGST Act and to set aside order of assessment dt.18.02.2021 passed by the 1st respondent.
2. The petitioner is a registered dealer under GST Act. The petitioner has availed Input Tax Credit of Rs.16,34,365/-. By contending that the petitioner had irregularly availed Input Tax Credit in contravention of Section 16(4) of the Act read with Section 20 of IGST Act, inasmuch as the due date for availing Input Tax Credit on invoices pertaining to Financial Year 2018-19 was 20.10.2019, whereas the petitioner had availed the same on 20.12.2019 i.e., beyond the date prescribed under the said provisions.
3. The 1st respondent issued intimation notice in Form GST DRC-01A, dt.03.11.2020 to the petitioner followed by show cause notice. The petitioner filed its reply dt.11.01.2021 stating that there was delay in receipt of payments from the Government, therefore there was delay in filing of GSTR-3B returns. After taking into consideration of the objections raised by the petitioner, the 1st respondent by impugned order dt.18.02.2021 directed the petitioner to pay or reverse the Input Tax Credit irregularly availed by the petitioners. Aggrieved by the said order, the present writ petition is filed.
4. Heard Sri S.Suri Babu, learned counsel appearing for petitioner and Sri B.V.S.Chalapathi Rao appearing for respondent Nos.1 & 2.
5. Perused the material available on record.
6. As per Section 16(4) of the Act, the petitioner had to avail Input Tax Credit on or before 20.10.2019 in relation to financial year 2018-19. From the record, it is evident that the petitioner had availed Input Tax Credit on 20.12.2019 i.e., beyond the time prescribed under the statute.
7. During the course of hearing, the counsel for the petitioner submit that in view of insertion of Section 16(5), the registered person is entitled to take Input Tax Credit in respect of return filed under Section 39, if the same is filed upto 30.11.2021 in relation to the financial years 2017-18 to 2020-2021. He would further submit that by virtue of the said introduction of Section 16(5), there is no restriction on the petitioner to avail the Input Tax Credit as the same was taken before 30.11.2021 and requested this Court to allow the writ petition by setting aside the impugned order.
8. The counsel for respondents while not disputing the submissions made by the counsel for the petitioner, would submit that, while entertaining the writ petition this Court by order dt.29.06.2021, directed the petitioner to file appeal as against the order under challenge. He would further submit that in tune with the said order, the petitioner filed appeal before the Appellate Authority and the same is pending consideration. In such circumstances, he cannot pray for setting aside the order under challenge.
9. We have considered the respective submissions made by the counsel on either side. It is not in dispute that by virtue of introduction of Section 16(5) of GST Act, the assesses are allowed to avail Input Tax Credit in any return under Section 39, if it is filed on or before 30.11.2021. In the case on hand, the petitioner has availed Input Tax Credit in relation to financial year 2018-2019 on 20.12.2019 i.e., beyond the cut of date before introduction of Section 16(5).
10. During the course of hearing, the counsel for the petitioner would submit that the petitioner is intending to withdraw the appeal filed by it. He would further submit that the petitioner is not interested to pursue the prayer challenging the validity of Section 16(4) of CGST & APGST and Section 20 of IGST Act, in view of introduction of Section 16(5) of GST Act.
11. Taking into consideration of the said submissions of the counsel for the petitioner, we deem it appropriate to set aside impugned order 18.02.2021 in view of introduction of Section 16(5) of GST Act, inasmuch as a time limit for availing Input Tax Credit was extended to 30.11.2021.
12. Accordingly, the writ petition is allowed. There shall be no order as to costs.
As a sequel, pending applications, if any shall stand closed.
