Case Law Details
Om Sakthi Maligai Vs Superintendent of GST & Central Excise (Madras High Court)
The Madras High Court disposed of a writ petition challenging an order dated 26.04.2024, which had confirmed a demand arising from a Show Cause Notice dated 25.12.2023 for the tax period April 2018 to March 2019. The demand was confirmed due to the petitioner’s failure to respond to the notice and on the ground that Input Tax Credit (ITC) had been availed belatedly under Section 16(4) of the GST enactments.
During the proceedings, it was noted that subsequent legislative changes had materially altered the legal position. Specifically, Section 16(5) and Section 16(6) were introduced through the Finance (No.2) Act, 2024, with effect from 27.09.2024 and given retrospective effect from 01.07.2017. These provisions effectively condoned delays in availing ITC for earlier tax periods, subject to fulfillment of prescribed conditions.
The Court observed that, by virtue of this statutory intervention, the earlier disallowance of ITC on account of delay stood cured. Even though the petitioner had not filed a reply to the Show Cause Notice, the Court held that the petitioner could still claim the benefit of ITC, provided it furnishes the necessary documents to establish entitlement, including proof relating to the transactions on which credit was claimed.
In light of these developments, the Court did not adjudicate the issue finally but instead remitted the matter back to the adjudicating authority. The respondent was directed to pass a fresh order on merits and in accordance with law, taking into account the amended provisions. This exercise was to be completed preferably within three months from receipt of the Court’s order.
The Court further directed that, subject to the petitioner complying with the requirement of furnishing relevant documents, any attachment of the petitioner’s bank account would stand automatically vacated.
Accordingly, the writ petition was disposed of with these directions, and no costs were awarded.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mrs.Revathi Manivannan, learned Senior Standing Counsel takes notice for the Respondent.
2. This Writ Petition is being disposed of at the time of admission with the consent of the learned counsel for the Petitioner and the learned Senior Standing Counsel for the Respondent.
3. The Petitioner is before this Court against the impugned Order bearing No.05/2024-GST TVR dated 26.04.2024 whereby the proposal in Show Cause Notice dated 25.12.2023 issued for the Tax Period April 2018-March 2019 has been confirmed. In absence of a reply to the Show Cause Notice, the demand has been confirmed on account of belated availing of Input Tax Credit under Section 16(4) of the respective GST Enactments which now stands condoned by virtue of insertion of Section 16(5) and Section 16(6) to the respective GST Enactments inserted by Finance (No.2) Act, 2024 (15 of 2024) dated 16.08.2024 with effect from 27.09.2024 vide SO 4253(E) with retrospective effect from 01.07.2017. By virtue of statutory intervention, the credit that was availed belatedly has been cured subject to certain condition.
4. Even if the Petitioner has not complied with the above condition i.e., filing of reply to the Show Cause Notice, the Petitioner is entitled to avail Input Tax Credit subject to the Petitioner filing requisite documents to establish that the Petitioner had indeed received interest on which Input Tax Credit was availed belatedly.
5. Considering the same, this case is remitted back to the Respondent to pass a fresh order on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months from the date of receipt of a copy of this order. Subject to the Petitioner complying the above stipulation, the attachment of the bank account of the Petitioner shall also stand automatically vacated.
6. This Writ Petition stands disposed of with the above observations. No costs. Connected Writ Miscellaneous Petition is closed.
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