PBS Traders Vs Assistant State Tax Officer (Kerala High Court)
Summary: Kerala High Court held that the petitioner was entitled to seek Input Tax Credit under Section 16(5) of the CGST Act where the relevant returns for the period September 2018 to March 2019 had been filed well before the statutory cut-off date of 30.11.2021. The petitioner, a registered taxpayer under the CGST/KSGST Act, challenged an order passed under Section 73 of the CGST Act. The order contained two discrepancies: denial of ITC for September 2018 to March 2019 on the ground that the returns were not filed within the statutory period under Section 16(4), and non-payment of interest for belated payment of tax. The petitioner confined its challenge to denial of ITC and did not contest the interest issue at that stage.
The Court noted that Section 16(5) provides entitlement to ITC where the taxpayer has furnished the relevant returns on or before 30.11.2021. The impugned order itself showed that the petitioner had filed the returns pertaining to September 2018 to March 2019 on 05.02.2020 and 22.07.2020. Since these dates fell within the cut-off prescribed under Section 16(5), the Court held that the petitioner was entitled to the benefit of the provision. Accordingly, Exts.P4 and P9 were quashed to the extent they denied ITC, and the assessing authority was directed to reconsider the matter and grant ITC under Section 16(5), if the petitioner was otherwise entitled.
Accordingly, the Kerala High Court disposed of the writ petition by quashing Exts.P4 and P9 to the extent they denied Input Tax Credit. The assessing authority was directed to reconsider the matter and grant ITC to the petitioner on the strength of Section 16(5), provided the petitioner was otherwise entitled to the credit. Thus, the denial of ITC merely on account of the time limit applied under Section 16(4) could not survive where the returns satisfied the cut-off contemplated under Section 16(5) of the CGST Act.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner is a registered tax payer under the provisions of the CGST/KSGST Act. The challenge raised in this writ petition is against Ext.P4 order passed under Section 73 of the CGST Act, which contain two discrepancies. Firstly, the Input Tax Credit claimed by the petitioner for the period from September 2018 to March 2019 were declined on the reason that the petitioner failed to submit the returns within the statutory period contemplated under Section 16(4) of the Act. Secondly, there is non payment of the interest for the belated payment of the tax as well. Challenge raised by the petitioner is against denial of Input Tax Credit, pertaining to the months from September 2018 to March 2019. Challenge is raised by the petitioner, placing reliance upon Section 16(5) of the CGST Act, which provides for the entitlement of the tax payer to get the Input Tax Credit, in case, the tax payer has submitted the returns on or before 30.11.2021. It is discernible from Ext.P4 order that, the petitioner had submitted the returns pertaining to the period from September 2018 to March 2019 on 05.02.2020 and 22.07.2020. Thus, it is evident that the petitioner submitted relevant returns within the cut off date contemplated under Section 16(5) and hence the petitioner is entitled to get the Input Tax Credit. As far as the interest for the belated payment of the tax and submission of returns are concerned, the petitioner is not contesting the same at present.
In such circumstances, this writ petition is disposed of quashing Exts.P4 and P9, to the extent it denied input tax credit on the ground that the petitioner submitted the returns within the period stipulated under Section 16(5) of the Act. There shall be a direction to the assessing authority to reconsider the matter and to grant Input Tax Credit to the petitioner on the strength of Section 16(5), if the petitioner is otherwise entitled.
