GST Relief: Kerala HC Allows ITC Claim Filed Within Extended Deadline Under Section 16(5)

The Kerala High Court has passed its judgement on a writ petition filed by a company named Philip Thomas against the State Tax Officer and others, challenging an order passed under Section 73 of the CGST Act. The impugned order had denied the  ITC (Input Tax Credit) claimed by the petitioner on the grounds that the petitioner had failed to furnish its return for March 2020 within the statutory time limit prescribed under Section 16(4) of the CGST Act.

However, the petitioner company claimed that as per the newly introduced Section 16(5) of the CGST Act, it is entitled to avail the disputed ITC since the return filed by them for March 2020 was within the cutoff date prescribed under the said section, i.e., November 30, 2021.

When the court analysed the facts of the case, it found the arguments raised by the petitioner relevant. The court noted that the petitioner in reality submitted its GST return for March 2020 on November 02, 2020, which is explicitly before the legal time limit prescribed under Section 16(5) of the Act, i.e., November 30, 2021. The court further noted that Section 16(5) begins with the words “Notwithstanding anything contained in subsection (4),” meaning it overrides the earlier time limit. In conclusion, the petitioner is entitled to avail ITC.

Considering the same, the court quashed the impugned order and sent the case back to the tax authorities for reconsideration. Additionally, directed the tax authorities to pass a fresh order within a period of three months from the date of receipt of a copy of this judgement, after giving the petitioner a proper chance of hearing.