A. R. Thaha Muhammed Vs Assistant State Tax Officer (Kerala High Court)
Summary: The petitioner, a registered taxpayer under the CGST/KGST Act, challenged an Order-in-Original for assessment year 2019-2020. The assessing authority identified two discrepancies: belated payment of tax on certain outward supplies, giving rise to interest under Section 50, and filing of returns for April 2019 through March 2020 beyond the time specified in Section 16(4), leading it to deny input tax credit for that period. The petitioner did not dispute the interest liability and stated that he was prepared to pay it. His challenge was confined to the denial of credit. He relied on Section 16(5), under which a taxpayer who furnishes the relevant return by 30.11.2021 may claim input tax credit. The Court examined the Ext.P2 series of returns and recorded that all the returns had been submitted on 28.12.2020 and 13.04.2021, within the date specified in Section 16(5). It therefore held that interference with the denial of credit was required.
The Kerala High Court quashed Ext.P1 only insofar as it denied input tax credit under Section 16(4). It directed the assessing officer to reconsider the matter and grant the benefit of input tax credit under Section 16(5) if the petitioner is otherwise entitled. The direction leaves the assessment of the other conditions for credit to the assessing officer; the petitioner’s acceptance of the separate interest liability was recorded without that portion of the order being quashed.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner is a registered taxpayer under the provisions of the CGST/KGST Act. The grievance raised by the petitioner is against Ext.P1 Order-in-Original passed in respect of the assessment year 2019-2020. In Ext.P1 assessment order, two discrepancies were noticed by the assessing authority. The first one was that the taxpayer had paid tax on certain outward supplies belatedly and, therefore, interest under Section 50 was liable to be paid. The second defect was that the petitioner submitted the returns pertaining to the months from April 2019 to March 2020 after the date specified in Section 16(4) of the CGST Act and, therefore, the petitioner was not entitled to claim the input tax credit in respect of the said period.
2. I have heard the learned counsel for the petitioner and the learned Government Pleader for the respondents.
3. As regards the first defect, namely, the interest under Section 50, it is submitted by the learned counsel for the petitioner that the petitioner does not have any dispute and is prepared to make the payment. The challenge raised by the petitioner is against the denial of input tax credit for violating Section 16(4) of the CGST Act. This contention is raised mainly by placing reliance upon Section 16(5) of the CGST Act, which provides that, in case the taxpayer furnishes the return within the cut-off date contemplated under Section 16(5), which is 30.11.2021, such taxpayer would be entitled to claim the input tax credit. It is discernible from Ext.P2 series of returns that, the petitioner had submitted all the returns on 28.12.2020 and 13.04.2021. Thus, it is evident that all the returns were submitted by the petitioner within the time stipulated in Section 16(5) and, therefore, the petitioner is entitled to claim the input tax credit. In such circumstances, an interference is required.
Accordingly, this writ petition is disposed of by quashing Ext.P1 to the extent it declines the input tax credit under Section 16(4) of the CGST Act, with a direction to the assessing officer to reconsider the matter and grant the benefit of input tax credit on the strength of Section 16(5) of the CGST Act, if the petitioner is otherwise entitled.
