ITC Cannot Be Denied if Return Filed Within Section 16(5) Time Limit: Kerala HC

The Kerala High Court granted significant relief to a registered taxpayer by allowing him the Input Tax Credit Claim (ITC) as the GST return was filed within the cut-off date specified under Section 16(5) of the CGST Act.

The GST department had denied the ITC claimed by the petitioner, Aji Vasu, on the grounds that the GST returns for all the months were not filed within the due date specified under Section 16(4) of the CGST Act. However, the petitioner on the other side argued that Section 16(5) allows him to claim ITC if returns are filed on or before 30 November 2021, overriding the time limit in Section 16(4).

The court examined the GST portal and observed that the petitioner’s return (between 10.01.2020 and 30.09.2020) was filed before the cut-off date specified in Section 16(5). Further, the Court observed that Section 16(4) starts with the words “Notwithstanding anything contained in sub-section (4)“, which means that Section 16(5) overrides the time limit specified under Section 16(4) if the returns are filed within the Section 16(5) time limit.

The court quashed the ITC denial order and remanded the matter to the GST authority for fresh consideration. The court also said that the petitioner must be given the refund of any amount recovered from him.