2025 (7) TMI 1603 - HC - GST

Implementation of the provisions of sub-sections (5) and (6) of Section 16 of the Central Goods and Services Tax Act 2017 - time limit to avail input tax credit under the provisions of sub-section (4) of Section 16 of the CGST Act - retrospective application - HELD THAT - As per circular issued by the Ministry of Finance dated 15-10-2024 time limit to avail input tax credit under the provisions of sub-section (4) of Section 16 of the CGST Act has been extended retrospectively. Resultantly it has been clarified that in cases where action has been taken under Section 73 or 74 of the CGST Act or orders have been passed in appeal under Section 107 or Section 108 of the CGST Act holding wrong availment of the input tax credit the concerned taxpayer has been allowed to move application for rectification of such order. As per the special procedure laid down under Section 148 of the Act as notified vide Notification No. 22/2024 dated 8-10-2024 the taxpayers would be allowed to move application for rectification within six months from the date of issuance of notification i.e. 15-10-2024 thus upto 15-4-2025 rectification application can be moved. The petitioner is allowed to move an application accordingly - petition disposed off.

Summary

The Punjab and Haryana High Court, through Justice Sanjeev Prakash Sharma, allowed the respondents to place their written statement on record in CWP-14569-2024. The Court considered the Ministry of Finance's circular dated 15-10-2024 clarifying the retrospective implementation (from 1-7-2017) of sub-sections (5) and (6) of Section 16 of the Central Goods and Services Tax Act, 2017 ("CGST Act"), inserted by the Finance Act, 2024. The circular extended the time limit to avail input tax credit under sub-section (4) of Section 16 retrospectively, permitting taxpayers who were previously held to have wrongly availed input tax credit under orders passed under Sections 73, 74, 107, or 108 of the CGST Act to file applications for rectification. Pursuant to the special procedure under Section 148 of the CGST Act, as notified by Notification No. 22/2024 dated 8-10-2024, taxpayers may apply for rectification within six months from the notification date (i.e., until 15-4-2025). The Court quoted Para 3.5 of the notification, which allows rectification applications where no appeal has been filed against orders confirming demand for wrong availment of input tax credit, but where such credit is now permitted under sub-sections (5) or (6) of Section 16. The Court disposed of the writ petition, permitting the petitioner to file a rectification application, and directed that any such application be decided in light of the amended provisions. All pending miscellaneous applications were dismissed.