Department's refusal to condone one-day delay in filing the 3B return form set aside; Retrospective Applicability Of Extended Time Limit For Availing ITC

Facts of the Case: –  In this case, SCN was issued for the financial year 2019-2020, raising the demand for tax along with interest, stating that the petitioner filed GSTR 3B for September 2020 with a one-day delay. The Petitioner contended that the delay in filing the return was caused by the pandemic and should be condoned, especially in light of the GST Council's recommendations to extend the deadline for ITC claims retroactively. Without condoning the delay, the department initiated the proceedings under Section 16(4) of the CGST/TNGST Act, 2017. Section 16(4) is only procedural, which is a directory and not mandatory. The 53rd GST Council, on June 22, 2024, recommended extending the deadline for availing ITC on any invoice or debit note under Section 16(4) of the CGST Act. This extension applies to any GSTR 3B returns filed for the financial years 2017-18, 2018-19, 2019-20, and 2020-21, with the new deadline deemed to be November 30, 2021. However, the respondent argued that Section 16(4) is mandatory, and the petitioner is not entitled to claim ITC beyond the statutory period, even if the delay is just one day.

Held that :-  The Court observed that the GST Council, in its 53rd meeting, recommended extending the deadline for filing GSTR-3B returns for the financial years 2017-18, 2018-19, 2019-20, and 2020-21, and the said extension applies retrospectively from July 1, 2017.

The court, while allowing the petition, held that the department refused to condone the delay and also proposed to reverse the ITC under Section 73(1) of the GST Act, which is detrimental to the interest of the petitioner and is hence liable to be set aside.

To read the complete judgment 2024 Taxo.online 1844