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इस पोस्ट को हिंदी में सुने

Benefit of extended date of Section 16(4) has to be given retrospectively from July 2017: High Court

Submission of Petitioner:

Procedural Provision : Petitioner submitted that Section 16(4) is a procedural provision, and by recourse to the procedural provision, the substantive right of the taxpayer, i.e., the claim of ITC on the inward supply, cannot be defeated.

Arbitrary : Provisions of Section 16(4) of the Act are arbitrary in nature and hence violative of Articles 14 and 19(1)(g) of the Constitution of India.

Late Fee & Interest on late filing : Filing of returns with late fees and interest cures the defect of late filing. Once a return has been filed with a late fee, the substantial claim of the dealer should not be defeated regarding ITC, which is otherwise admissible to him under the provisions of the Act. Once the returns are accepted with the late fee, the dealer should be eligible for the ITC. Once the delay is regularised, such returns are to be construed to be filed within the due date.

ITC is a Vested Right : It is further submitted that ITC is a facility of credit, and it is in the nature of vested rights. The credit earned under the GST Act is the property of the taxable person, and therefore, the denial of ITC would be in violation of Article 300A of the Constitution of India.

Non-disclosure of ITC in GSTR-3B is only a procedural lapse : Since, the details of ITC are already available in GSTR-2A, which is available with the Department prior to the due date prescribed under Section 16(4), and the availment of ITC would be a mere disclosure in GSTR-3B, therefore, the substantial benefit cannot be denied due to procedural lapse of mere non-disclosure in GSTR-3B within the due date.

Supplier acts as an agent of Govt to collect tax : It is also submitted that the supplier dealer acts as an agent of the Government to collect tax from the recipient dealer. The recipient dealer would pay the tax to the supplier dealer while receiving the supply of goods or services from him, and the supplier dealer collects tax on behalf of the Government to be deposited by him with the Government. It is submitted that though the tax has been collected by the Government through the supplier dealer, the ITC would be disallowed to the recipient dealer on the ground that he could not file the return in GSTR-3B on time and did not claim the ITC within the time specified under Section 16(4).

ITC denial amount to Double Taxation : It is also submitted that it amounts to double taxation; the recipient dealer would have already paid the tax on the supply received to the Government through the supplier dealer, but if he, for any reason, has not filed the return on GSTR-3B claiming ITC on time, he would have to pay entire tax with interest and penalty. It is, therefore, submitted that such a condition of claiming ITC by filing GSTR-3B on time is unreasonable and arbitrary against the spirit of the GST regime.

Purpose of Law : The purpose of Section 16(4) is to ensure that the ITC should be taken in a timely manner within the specified time limit in the Books of Accounts of the registered tax person. Section 16(4) of the Act does not permit to avail ITC relating to the preceding financial year in case of delayed filing of the subsequent year’s September month GSTR-3B. Considering the intricacies, and complexity associated with return filing during the initial years of GST, Technical glitches, frequent amendments, the careful process followed in ascertaining eligible ITC, knowledge level of the taxpayer in understanding the flow of credit through a dynamic return GSTR-2A and other related factors should be considered, and therefore, if the returns have been filed beyond the time prescribed with late fees, the dealers should not be denied of his claim for ITC as reflected in GSTR-2A.

Held by High Court:

Government had realized the difficulty in the initial roll out of the GST regime under the CGST/SGST Act and considered that GSTR-2A was not available initially, during the implementation of GST. .......
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Jun 8, 2024


Sir...please share full judgement..
By: Bhawna Bansal
Jun 8, 2024
Very nice given by judgement by high court.
By: S Ganesan
Jun 8, 2024
Which high court gives
above judgement
By: Swapnil Raut
Jun 8, 2024
Replied to Swapnil Raut
By: Arindam Sarkar
Jun 8, 2024
Replied to Swapnil Raut
Kerala High Court
By: Mansi Sharma
Jun 8, 2024
Replied to Swapnil Raut
Kerala High Court
By: Unnikrishnan
Jun 11, 2024
Reqd abv judgement copy
By: Jeetendra Patkar
Jun 8, 2024
There is provision in section 16(4) which say taking credit while under same section 16(2) talk about availment. ITC taking action and ITC availing action both have differnet conotation.
ITC is taken in BOOKS OF ACCOUNT and ITC AVAIL through filing GSTR 3B. Section 16(4) restrict the ITC taking in books of account, not restrict the availment of ITC in GSTR 3B return. Therefore, the RESTRICTING ITC of taking in books apply when assessee has not taken invoice in books of account by 30th November. ITC can not be restricted based on when assessee has filed return.
Department, does not allow the return without payment of late fee of GSTR 3B. The GSTN does not allow to file return of ITC, and even not allow GSTR 3B without payment of late fee.
GSTN work in breach of provision of the act. If Act says GSTR 1 is self assessed tax, and GSTR 3B is discharged tools. But filing GSTR 3B, GSTN restrict to file and avail and utilize the ITC on ground of short payment of tax or late fee.
There is engough power provided to recover tax within law, but by making procedure cumbersome/ impossible to comply by GSTN, create a situation, which never thought by the law maker nor public while draft law was placed in public for comment.
Court must understand and develope such juriprudence for interpreting revenue statute which clarify the public grievance at large. It is matter of difference of procedure as laid down in statute book and as implemented throught web basis application. Court must understand that law as per book and as per application for implementation both are running on different manner. Online portal provides their own logical restriction which are not part of statute nor prescribed in law and rules made there under. When this matter every assessee pleads and put on record before the adjudicating officer and appellate authority, so they understand that and distinguish how the public at large are misguided by law as well as portal service. In my humble opinion, lawyer taking great ground with constitutional machinery, but such basic fact must bring on records of court so they can use their constitutional fiduciary authority in right and proper manner and reduce the unintentional dispute.
By: Ca Piyush Panchal
Jun 10, 2024

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