Facts of the Case:

The petitioner challenged the order dated 10.02.2025 rejecting its claim for input tax credit (ITC). The petitioner contended that its GST registration had been cancelled by an order dated 28.03.2022 and was subsequently revoked. Relying on the newly inserted Section 16(6) of the CGST Act, it argued that the statutory time limit for availing ITC stood extended, enabling it to claim ITC by filing returns within 30 days from the date of revocation of cancellation of registration. The Revenue, however, argued that Section 16(6) could not be read in isolation and that the benefit was available only where the taxpayer satisfied the condition prescribed in Section 16(4) on the date of cancellation of registration.

Issue:

Whether a registered person whose GST registration has been revoked can claim the benefit of Section 16(6) to avail input tax credit even though such credit had already become time-barred under Section 16(4) on the date of cancellation of registration.

Held That:

The Madras High Court held that Section 16(6) does not create a fresh or independent entitlement to input tax credit. Rather, it merely extends the time for filing returns where the taxpayer was otherwise eligible to avail ITC on the date of cancellation of registration. The Court observed that Section 16(6) expressly incorporates the condition contained in Section 16(4) by providing that the benefit is available only where the availment of ITC was not restricted under Section 16(4) on the date of cancellation of registration.

The legislative intent is to ensure that a taxpayer is not deprived of an otherwise valid ITC merely because returns could not be filed during the period when the registration remained cancelled. Accordingly, where the ITC itself had already become time-barred under Section 16(4) as on the date of cancellation, Section 16(6) cannot revive or resurrect such extinguished credit. Since the petitioner was not eligible to avail ITC under Section 16(4) on the date its registration was cancelled, it was held to be ineligible for the benefit of Section 16(6). Consequently, the writ petition was dismissed.

Case Name: Venus Infra Projects v. Assistant Commissioner of ST dated 09.07.2026

To read the complete judgement 2026 Taxo.online 1988