Umashankar Alloys Private Limited Vs Assistant Commissioner of Central Tax (Madras High Court)
In the case of Umashankar Alloys Private Limited Vs. Assistant Commissioner of Central Tax, the Madras High Court addressed the issue of denied Input Tax Credit (ITC) for the assessment years 2017-2018 and 2018-2019. The petitioner challenged the impugned Order-in-Original No. 02/2022 dated February 1, 2022, which pertained to delayed claims for ITC contrary to Section 16(4) of the Goods and Services Tax (GST) enactments. The petitioner’s counsel highlighted recent legislative changes through Clause 114 of the Finance (No. 2) Bill, 2024, referencing the GST Council’s recommendations during its 53rd meeting. This change indicates Parliament’s intention to facilitate the availing of ITC rather than to restrict it.
The Court noted its previous consistent rulings, which had remitted similar matters back to the authorities for reconsideration in light of the amendments to Section 16 of the GST enactments. These amendments included the introduction of Sections 16(5) and 16(6) of the Central Goods and Services Tax (CGST) Act. The Court also cited a Supreme Court decision indicating that, once a tax is demanded, the benefit of ITC must be extended to the taxpayer. Consequently, the Madras High Court set aside the impugned order and directed the respondent to issue a fresh order on the matter, ensuring compliance with the revised provisions of the Tamil Nadu Goods and Services Tax Act, 2017. The Court mandated that this new order be issued within six months of receiving a copy of the order, ultimately allowing the petitioner a pathway to potentially reclaim the denied ITC. The writ petition was disposed of without costs, and the connected miscellaneous petition was closed.
