Sachu Sony Vs Superintendent (Kerala High Court)
Summary: The petitioner, an assessee under the CGST/KGST Act, challenged Ext.P2 Order-in-Original concerning multiple assessment years, namely 2018-2019, 2019-2020 and 2020-2021. The challenge was based on two grounds.
First, the petitioner contended that Ext.P2, being a composite order covering multiple assessment years, was legally unsustainable. Reliance was placed on Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories [2025 KHC OnLine 149] and Tharayil Medicals (M/s.), Thrissur v. Deputy Commissioner, Thrissur [2025 KHC OnLine 467] in W.A. No.627/2025.
Second, the petitioner challenged the denial of input tax credit for certain months on the ground that the relevant returns had not been furnished within the period contemplated under Section 16(4) of the CGST Act. The petitioner relied on Section 16(5), contending that the relevant returns had been submitted before the cut-off date of 30.11.2021 and that the petitioner was therefore entitled to the benefit of input tax credit. The Court found merit in the submission.
The Kerala High Court held that the issue concerning composite notices/orders for multiple assessment years had already been settled by the Division Bench decisions in Tharayil Medicals and Lakshmi Mobiles. The Court also recorded that the petitioner would be entitled to relief under Section 16(5) if the relevant returns had been submitted on or before 30.11.2021.
Accordingly, the Court disposed of the writ petition by quashing Ext.P2 order, the notice forming the basis of Ext.P2 and Ext.P2(a) summary of the order. The respondents were left free to issue fresh notices separately for each assessment year. The Court further directed that the benefit of Section 16(5) of the CGST Act be extended in the fresh proceedings if the petitioner had submitted the relevant returns within the prescribed cut-off date. The period from the date of Ext.P2 until receipt of a certified copy of the judgment was directed to be excluded while computing the time limit for completing the assessment.
Challenge to Composite Order for Multiple Assessment Years
The petitioner challenged Ext.P2 Order-in-Original covering the assessment years 2018-2019, 2019-2020 and 2020-2021. The specific contention was that a composite order covering multiple assessment years was not legally sustainable.
The petitioner relied on the decisions in Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories [2025 KHC OnLine 149] and Tharayil Medicals (M/s.), Thrissur v. Deputy Commissioner, Thrissur [2025 KHC OnLine 467] in W.A. No.627/2025.
Court’s Observation on Composite Proceedings
After hearing the learned counsel for the petitioner and the learned Standing Counsel for the respondents, the Court found merit in the petitioner’s submission.
The Court observed that the issue relating to a composite notice/order for multiple assessment years had already been settled by a Division Bench in Tharayil Medicals and Lakshmi Mobiles, where it was held that such notices/orders were not legally sustainable.
On that basis, the Court held that interference with the impugned proceedings was required.
Input Tax Credit and Section 16(5)
The petitioner also challenged the denial of input tax credit pertaining to certain months. The denial was based on the stated failure to furnish returns within the period contemplated under Section 16(4) of the CGST Act.
The petitioner relied on Section 16(5), under which, as stated in the judgment, a taxpayer who had submitted the relevant returns on or before 30.11.2021 would be entitled to the benefit of input tax credit.
The petitioner specifically pointed out that the relevant returns had been submitted before the 30.11.2021 cut-off date.
Benefit of Section 16(5) in Fresh Proceedings
The Court recorded that the petitioner would be entitled to relief based on Section 16(5) if the petitioner had submitted the relevant returns on or before 30.11.2021.
The Court therefore directed that, while initiating fresh proceedings, the petitioner should be extended the benefit of Section 16(5) of the CGST Act if the relevant returns had been submitted within the prescribed cut-off date.
The treatment of input tax credit under Section 16(5) and the 30.11.2021 cut-off date has also been considered in other TaxGuru publications, including Section 16(5) ITC Rejection Quashed as Returns Were Filed Within Cut-Off Date: Kerala HC.
Kerala High Court’s Final Directions
The Court held that the matter required reconsideration and disposed of the writ petition by quashing:
- Ext.P2 Order-in-Original;
- the notice which formed the basis of Ext.P2; and
- Ext.P2(a), the summary of the order.
The respondents were permitted to issue fresh notices separately for each assessment year.
The Court further directed that, in the fresh proceedings, the petitioner should receive the benefit of Section 16(5) of the CGST Act if the petitioner had submitted the relevant returns within the cut-off date contemplated under that provision.
For computing the time limit for completing the assessment, the Court directed that the period from the date of Ext.P2 until the date of receipt of a certified copy of the judgment should be excluded.
Cases Discussed
- Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories [2025 KHC OnLine 149] — Kerala High Court
- Tharayil Medicals (M/s.), Thrissur v. Deputy Commissioner, Thrissur [2025 KHC OnLine 467] in W.A. No.627/2025 — Kerala High Court
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner, is an assessee under the provisions of the CGST/KGST Act, has approached this Court being aggrieved by Ext.P2 Order-in-Original passed in respect of the multiple assessment years, namely, 2018-2019, 2019-2020 and 2020-2021. The challenge raised by the petitioner against the said order is twofold. Firstly, it was contended that the same, being a composite order for multiple assessment years, is not legally sustainable in the light of Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories [2025 KHC OnLine 149] and Tharayil Medicals (M/s.), Thrissur v. Deputy Commissioner, Thrissur [2025 KHC OnLine 467] in W.A. No.627/2025.
2. Apart from the above, the input tax credit claimed by the petitioner was declined pertaining to certain months, on the ground that the petitioner failed to furnish the returns within the period contemplated under Section 16(4) of the CGST Act. As far as the said finding is concerned, an interference is required in the light of Section 16(5), wherein it is provided that, in case the taxpayer has submitted the returns, within the cut-off date contemplated under the said provision, namely, 30.11.2021, such taxpayer would be entitled to the benefit of input tax credit. It is pointed out that, in this case, the petitioner had submitted the relevant returns before the said cut-off date. Therefore, the petitioner is entitled to the same.
3. After hearing the learned counsel for the petitioner and the learned Standing Counsel for the respondents, I find merits in the said submission.
4. This is because, as regards the contention relating to a composite notice/order for multiple assessment years, the issue is already settled by a Division Bench of this Court in Tharayil medicals’s case (supra) and Lakshmi Mobiles’s case (supra), wherein it was held that such notices/orders are not legally sustainable. Therefore, an interference is required.
5. Similarly, as regards the contention of the petitioner based on Section 16(5), the petitioner would be entitled to the relief if the petitioner had submitted the relevant returns on or before 30.11.2021.
In such circumstances, I am of the view that the matter requires reconsideration. Accordingly, this writ petition is disposed of by quashing Ext.P2 order, the notice which formed the basis of Ext.P2, as well as Ext.P2(a) summary of the order, without prejudice to the right of the respondents to issue fresh notices separately for each assessment year. It is further ordered that, while initiating fresh proceedings, the petitioner shall be extended the benefit of Section 16(5) of the CGST Act, if the petitioner had submitted the returns within the cut-off date contemplated under the said provision. It is further ordered that, while computing the time limit for completing the assessment, the date of Ext.P2 till the date of receipt of a certified copy of this judgment shall be excluded.
