HIGH COURT OF MADHYA PRADESH
ANAND STEEL V. UNION OF INDIA
WRIT PETITION NO. 2164, 1280, 1859, 2133, 2964, 3551, 3664, 13142, 14857, AND 14975 OF 2024 NOVEMBER 22, 2024
The petitioner duly filed GSTR-3B returns for the financial year 2018-19 with late fees and also availed ITC as per Section 16 of the CGST Act. Subsequently, the Assistant Commissioner of GST issued a notice under Section 73 in FORM GST DRC-01A on July 27, 2023, proposing to disallow the ITC on the ground of late filing of the GSTR-3B returns. Despite replying to the notice, the respondent passed the impugned order on February 13, 2024 under Section 74, disallowing the ITC. The petitioner contended that the time limit imposed under Section 16(4) of the CGST Act for claiming ITC violates constitutional provisions, including Articles 14, 19(1)(g), and 300A, and argued that procedural lapses should not restrict substantive rights like ITC.
Now the issue arises, Whether Section 16(4) of the CGST Act, which imposes a time limit for claiming ITC, is arbitrary and violative of Articles 14, 19(1)(g), and 300A of the Constitution of India and Whether the retrospective amendment in Rule 61(5), declaring GSTR-3B as a return under Section 39, caused unfair hardship to taxpayers and offended the principle of legitimate expectation and Whether the procedural lapse in late filing of GSTR-3B, despite payment of taxes, interest, and late fees, justifies disallowance of ITC?
The Hon’ble Madras High Court Noted that, the controversy surrounding Section 16(4) of the CGST Act has been addressed by the Finance Act, 2024, through the incorporation of sub-sections (5) and (6) into Section 16. The Court took cognizance of a similar judgment by the Madurai Bench of the Madras High Court in W.P. No. 20773/2023, where the matter was remanded to the adjudicating authority for fresh consideration in light of the amended provisions. Following the principle laid down in that case, the Court set aside the impugned order and remanded the matter back to the adjudicating authority, directing it to reconsider the case afresh in accordance with the amended Section 16 of the CGST Act.
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