Mobile City Communication Vs State Tax Officer (Kerala High Court)
Summary: The Kerala High Court considered a writ petition filed by M/s. Mobile City Communication, a registered taxpayer under the CGST/KGST Act, challenging Ext.P4 Order-in-Original passed under Section 73 of the CGST Act. The petitioner’s grievance was that input tax credit claimed for January, February and March 2019 had been declined on the ground that the returns were not submitted within the period stipulated under Section 16(4) of the Act. The petitioner had subsequently filed an application for rectification, which was rejected by Ext.P9.
The petitioner relied upon Section 16(5) of the Act and contended that where the taxpayer submitted the return within the cut-off date contemplated under that provision, the taxpayer would be entitled to the benefit of input tax credit. The judgment records the cut-off date relied upon by the petitioner as 31.11.2021. The Court noted that Ext.P4 itself disclosed that the returns for the relevant months had been submitted by the petitioner on 31.10.2019.
On the basis of the dates recorded in Ext.P4, the Court found that the petitioner was entitled to the benefit of Section 16(5) and held that interference was required. The Court therefore disposed of the writ petition by quashing Exts.P4 and P9 to the extent that they declined input tax credit for failure to file the returns within the period stipulated under Section 16(4).
The Court directed the competent authority to reconsider the matter and grant the petitioner input tax credit on the strength of Section 16(5), if the petitioner was otherwise entitled. Thus, the relief granted was a quashing and reconsideration direction rather than an unconditional final grant of input tax credit.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner is a registered tax payer under the provisions of the CGST/KGST Act. Challenge raised by the petitioner in this writ petition is against Ext.P4 Order-In-Original passed under Section 73 of the CGST Act. Grievance of the petitioner is that, as per the said order, input tax credit claimed by the petitioner pertaining to the months of January, February and March, 2019 was declined on the reason that, the petitioner failed to submit the returns within the period stipulated under Section 16(4) of the Act. Although the petitioner submitted an application for rectification, the same was rejected as per Extv P9 order.
2. The challenge raised by the petitioner is by relying on Section 16(5) of the Act, which provides that, in case the taxpayer is submitting the return within the cut off date contemplated under the Act, i.e., 31.11.2021, such taxpayer would be entitled to get the benefit of input tax credit. In this case, it is discernible from Ext.P4 that, the returns for the relevant months were submitted by the petitioner on 31.10.2019 and hence, the petitioner is entitled to the benefit of the said provision. Therefore, an interference is required.
In such circumstances, this writ petition is disposed of quashing Exts.P4 and P9, to the extent it declined input tax credit for not filing the returns within the period stipulated under Section 16(4) of the Act, with a direction to the competent authority to reconsider the matter and grant the petitioner the input tax credit, on the strength of Section 16(5) of the Act, if the petitioner is otherwise entitled.
