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