The Calcutta High Court in the case of DYS IMPEX PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF REVENUE, STATE TAX, REFUND UNIT & ORS., Vide WPA 2980 of 2025 dated 25.06.2025, acknowledged that Section 16(5) was inserted into the CGST and WBGST Acts retrospectively with effect from 1st July 2017, allowing input tax credit (ITC) for FYs 2017-18 to 2020-21 if the return under Section 39 was filed up to 30th November 2021. Thus, any ITC claimed through a return filed before 30.11.2021, even if delayed beyond the due date in Section 16(4) cannot be denied, as Section 16(5) overrides that bar. Since the petitioner had filed the return and claimed ITC before 30.11.2021 within the extended time , the refund could not be denied merely due to timing based on the earlier Section 16(4) threshold.

Facts of the Case: In this case, the petitioner filed a refund claim for unutilized Input Tax Credit (ITC) for the tax period July 2019 to September 2019. A partial refund rejection order dated 14.04.2023 was issued in Form GST RFT-06 by the Proper Officer, citing that some ITC pertained to Financial Year 2017–18 and was claimed belatedly in the return for September 2019, violating Section 16(4) of the CGST/WBGST Act.

The petitioner filed an appeal, which was rejected by the Appellate Authority via order dated 21.02.2024, reiterating that the ITC claim was time-barred under the proviso to Section 16(4).

The petitioner challenged both the refund rejection order and the appellate order by filing a writ petition, contending that due to the retrospective insertion of Section 16(5) with effect from 01.07.2017, their ITC claim was within the permissible time as the return was filed before 30.11.2021.

Issue: Whether the refund claim based on ITC pertaining to FY 2017–18, filed through the return for September 2019, is valid in view of the retrospective insertion of Section 16(5) of the CGST/WBGST Act, 2017, which overrides the time limitation in Section 16(4)

Held that: The Court held that both the Proper Officer and Appellate Authority erred by applying only Section 16(4) without considering the retrospective effect of Section 16(5). Section 16(5), inserted with retrospective effect from 01.07.2017, permits ITC for FYs 2017–18 to 2020–21 if claimed in any return filed under Section 39 on or before 30.11.2021. The appellate authority assumed that since ITC was claimed in September 2019 for FY 2017–18, it fell outside the permissible period under Section 16(4). However, it ignored Section 16(5), which allows such claims provided the return is filed before 30.11.2021.

Since the ITC in question was claimed in the return for September 2019, it was well within the extended deadline and hence eligible under the law. The orders by Proper Officer and by Appellate Authority were thus found to be unsustainable in law.

The High Court set aside both partial refund rejection order and the appellate order. The matter remanded to the proper officer for fresh adjudication, applying Section 16(5) correctly.

To read the complete judgment 2025 Taxo.online 1345