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2025 (5) TMI 631 - HC - GSTRejection of Input Tax Credit - return was filed beyond the time provided - HELD THAT - A Division Bench of this Court had considered the same issue in its judgment M/S. PADMAVATHI ENTERPRISES VERSUS SUPERINTENDENT OF CENTRAL TAX AND OTHERS 2025 (5) TMI 372 - ANDHRA PRADESH HIGH COURT . The Division Bench after considering the effect of sub section (5) of Section 16 of the GST Act in a similar situation had held that the petitioner by virtue of the non-obstante clause available in the provision would be entitled to avail the credit which was rejected by the Assessing Officers in the case before the Division Bench. A perusal of the facts in the present case would show that the facts in this case are similar to the facts in the case before the Division Bench. This Writ petition is allowed setting aside the order of Assessment dated 30.04.2024 and the matter is remanded back to the 3rd respondent to pass a fresh assessment order keeping in view the insertion of Section 16 (5) of the CGST Act - Petition allowed by way of remand.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court include:
2. ISSUE-WISE DETAILED ANALYSIS Limitation Period for Assessment under Section 73 of the GST Act The petitioner challenged the order dated 30.04.2024 on the ground that it was passed beyond the three-year limitation period prescribed under the GST Act for the financial year 2018-2019. The petitioner contended that the order was barred by limitation and therefore void. The Court examined the limitation framework under the GST Act, which restricts issuance of assessment orders to within three years from the due date of filing the relevant return. The petitioner argued that any extension granted by government circulars or orders was impermissible unless compliant with Section 168-A, which allows extension only under force majeure circumstances. The Court noted the petitioner's contention that the government orders extending limitation did not specify any force majeure condition, rendering such extensions invalid. This raised the question of whether the limitation period was effectively extended and, if not, whether the order was time-barred. The Court found that the petitioner's argument on limitation was relevant but required further consideration in light of the subsequent legislative amendment discussed below. Validity of Extension of Limitation under Section 168-A of the GST Act The petitioner challenged the extension of limitation granted by government circulars, arguing that Section 168-A permits extension only in force majeure situations, which were absent in the instant case. The petitioner urged that the circulars granting extension without specifying force majeure were ultra vires and should be set aside. The Court considered the statutory language of Section 168-A and the conditions under which limitation could be extended. It acknowledged the petitioner's contention that the extensions granted did not comply with the statutory mandate of force majeure. The Court observed that this issue was intertwined with the limitation challenge and would be addressed in the context of the legislative amendment which impacted the entitlement to ITC and the assessment order. Validity of the Assessment Order for Lack of Signature or DIN The petitioner contended that the impugned order was invalid as it lacked a signature or Document Identification Number (DIN), which are essential for authentication and validity of orders under the GST framework. The Court noted the petitioner's submission that absence of these formalities rendered the order non-est and void. The Court recognized the importance of procedural compliance in issuance of orders but did not elaborate extensively on this point in the judgment, focusing instead on substantive entitlement to ITC and limitation issues. Entitlement to Input Tax Credit under Section 16(2) of the GST Act The petitioner argued that Section 16(2) entitles a registered person to claim ITC upon filing returns and submitting necessary documents evidencing entitlement. The petitioner maintained that it had complied with these requirements and hence the denial of ITC by the 3rd respondent was unjustified. The Court examined the interplay between Section 16(2) and Section 16(4), the latter barring ITC if returns are filed beyond the due date prescribed under Section 39. The petitioner's returns for September 2019 were filed late, triggering rejection of ITC under Section 16(4). The Court acknowledged the petitioner's contention but noted that the legal landscape was altered by a subsequent amendment. Impact of Legislative Amendment - Insertion of Section 16(5) of the GST Act A critical development was the insertion of Section 16(5) by the Finance Act, 2024, effective from 27.09.2024, which states: "Notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed up to the thirtieth day of November, 2021." The petitioner contended that this provision overrides the restriction in Section 16(4) and entitles it to claim ITC for the relevant financial year 2018-19, as the returns were filed before 30.11.2021. The Court referred to a Division Bench decision of the same High Court, which had considered an identical issue and held that the non-obstante clause in Section 16(5) grants entitlement to ITC notwithstanding delayed filing beyond the original due date. Applying the precedent, the Court found that the petitioner was entitled to ITC under the amended Section 16(5), and the rejection of ITC by the 3rd respondent was unsustainable. Consequently, the Court set aside the impugned order and remanded the matter for fresh assessment in light of the amendment. 3. SIGNIFICANT HOLDINGS The Court's crucial legal reasoning includes the following verbatim extract from the Division Bench precedent cited: "By virtue of the non-obstante clause available in Section 16(5) of the CGST Act, the petitioner is entitled to avail the credit which was rejected by the Assessing Officers." The core principles established are:
Final determinations on each issue are:
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