Petitioner was allowed to take ITC in respect of delayed returns as per amended GST law

Overview:

In a notable decision that clarifies the scope of retrospective legislative amendments, the Jharkhand High Court held that input tax credit (ITC) cannot be denied merely due to delayed return filing when such delay stands regularized by subsequent amendments. Shri Sai Super Market had filed GSTR-3B returns belatedly for FY 2019–20. The department denied ITC of ₹11.93 lakh, citing violation of Section 16(4) of the CGST Act, which earlier limited the time for availing credit.

However, the petitioner relied on the recently introduced Section 16(5) through the Finance (No.2) Act, 2024, which retrospectively extended the deadline for returns from FY 2017–18 to FY 2020–21 to 30 November 2021. The petitioner argued that the return was filed within this extended timeline, thereby entitling it to the credit.

The division bench led by Chief Justice M.S. Ramachandra Rao held that the legislative intent behind the amendment was to mitigate the hardship faced by taxpayers who had genuine difficulties in timely compliance. The Court found the amendment to be curative in nature and capable of retrospective application.

Importantly, the Court directed the authorities not only to restore the ITC but also to refund the interest and penalty amounts, reinforcing the principle that procedural delays—when cured by statute—cannot be used to deny substantive rights. This judgment is expected to benefit a wide class of taxpayers and will likely serve as a precedent in ITC-related litigations. It confirms the judiciary’s willingness to apply purposive interpretation in favour of business continuity and taxpayer protection under evolving GST law.

Case: Shri Sai Super Market v. Union of India, decided on 11.11.2024 by Jharkhand High Court

IN THE HIGH COURT OF JHARKHAND AT RANCHI
M.S. RAMACHANDRA RAO, CJ. AND DEEPAK ROSHAN, J.

SHRI SAI SUPER MARKET

Versus

UNION OF INDIA

GST : Input Tax Credit in respect of delayed returns filed for Financial Year 2019- 20 was to be allowed; interest and penalty levied were to be refunded with 6 per cent interest.

Input tax credit – Filing of returns – Limitation period – Financial Year 2019-20 – ITC was disallowed on ground that
monthly returns in GSTR-3B were filed after due date – HELD : Section 16(5) was inserted for extending period for filing of returns prescribed under section 39 of the CGST Act, 2017 i.e., GSTR-3B returns upto 30-11-2021 for Financial Year 2017- 18 to 2020-21 and petitioner filed its return in GSTR-3B within said extended period – In view of clause (5) of section 16 inserted by Finance (No.2) Act, 2024, with effect from 1-7-2017, Input Tax Credit in respect of delayed returns filed in current Year was to be allowed – Interest and penalty levied were to be refunded with 6 per cent interest [Section 16, read with section 39, of Central Goods and Services Tax Act, 2017/Jharkhand Goods and Services Tax Act, 2017] [para 3]

In favour of assessee

REPRESENTED BY : Shri Amrita Sinha, Adv. for the Petitioner.
Shri Amit Kumar, Sr. S.C. (CGST), for the Respondent.

[Order per : M.S. Ramachandra Rao, C.J.]. – This application has been filed seeking for the following reliefs:-

(i) For issuance of an appropriate writ/order/direction, including Writ of Certiorari for quashing/setting aside the Order-inOriginal No. 08/SUPDT./CGST&CX/CHAS-II/BK-1/2024 dated 14.08.2024 [Annexure-8] passed under Section 73 of the Central Goods and Services Tax Act, 2017 (hereinafter referred as “CGST, 2017” for short) by Respondent No. 4, wherein by relying upon provisions of Section 16(4) of the CGST Act, 2017, Input Tax Credit (hereinafter referred as “ITC” for short) to the tune of Rs. 11,93,004/- has been disallowed for the Financial Year 2019-20 and Petitioner has been directed to reverse the said amount of ITC along with applicable rate of interest and penalty on the sole ground that Petitioner filed its Monthly Returns in GSTR-3B after due date of furnishing of returns under Section 39 of the CGST Act, 2017; especially because, vide Finance (No.2) Act, 2024 notified vide Notification dated 16th August, 2024 [Annexure-9], sub section (5) of Section 16 of the CGST Act, 2017 has been inserted extending the period for filing of returns prescribed under Section 39 of the CGST Act, 2017 till 30th November, 2021 for the Financial Year 2017-18 to 2020-21 with effect from 1st July, 2017;
(ii) For issuance of further appropriate writ/order/direction including Writ of Declaration, declaring that Petitioner is duly entitled to claim ITC amounting to Rs.11,93,004/- as vide Finance (No.2) Act, 2024 notified vide Notification dated 16th August, 2024 [Annexure-9], Section 16(5) of the Central Goods and Services Tax Act, 2017 has been inserted extending the period for filing of returns prescribed under Section 39 of the CGST Act, 2017 i.e. GSTR-3B returns upto 30th November, 2021 for the Financial Year 2017-18 to 2020-21 and Petitioner filed its returns in GSTR-3B within the said extended period.
2. Heard both sides.
3. In view of Clause (5) of Section 16 inserted by the Finance (No.2) Act, 2024, with effect from 01.07.2017, the respondents are directed to allow the petitioner to take Input Tax Credit in respect of delayed returns filed for the Financial Year 2019-20, and the interest and penalty levied on the petitioner by the respondents shall be refunded with 6% p.a. interest from the date of such collection till the date of repayment.
4. Accordingly, this writ petition stands disposed of.

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