The Madras High Court has remanded several writ petitions involving the denial of Input Tax Credit ( ITC ) under Section 16(4) of the GST ( Goods and Services Tax ) Act, 2017 back to the Assessing Officer ( AO ) for a fresh review in light of the Finance Act, 2024.
Justice C. Saravanan decided that “Since the Parliament itself has come to the rescue of the assessees, I am of the view that the impugned orders passed by the Original Authority as also the Appellate Authority upholding the orders of the Assessing Officer in the batch of Writ Petitions are set aside and the cases are remitted back to the Assessing Officer to pass a fresh order on merits strictly in accordance with the Finance Act, 2024. In case, the proposals in Clauses 114 and 146 of the Finance (No.2) Bill, 2024 are accepted and enacted in the Finance Act, 2024, the benefit of these provisions may be extended to the respective petitioners.”
Essential Training for Tax Professionals: Know Your Sections!, Click here
The petitioners had challenged the assessment orders that denied them ITC for claiming it beyond the statutory deadline mentioned under Section 16(4) of the GST Act.
The court noted that the Finance (No. 2) Bill, 2024, introduced amendments extending ITC benefits to taxpayers for the assessment years 2017-2018 to 2020-2021. These amendments, particularly Clauses 114 and 146 of the bill, provide an extension of time for claiming ITC and prevent refunds of taxes paid or credit reversed before the bill’s enactment. The bill also allows taxpayers to claim ITC on invoices and debit notes filed before November 30, 2021.
Thus, in light of the amendments, the high court set aside the impugned orders passed by the original and appellate authorities. It directed the AO to pass fresh orders in accordance with the new provisions of the Finance Act, 2024. If the proposed amendments are enacted, the petitioners will be entitled to the extended ITC benefits.
Essential Training for Tax Professionals: Know Your Sections!, Click here
However, the court directed that the petitioners had to deposit 25% of the disputed tax, excluding the denial of input tax credit for the wrong availing of input tax credit. Subject to this condition, the court directed to pass orders on merits.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
