[BREAKING] GST ITC allowable on Delayed Returns for the FY 2017-18: Jharkhand HC directs Refund of Penalty & Interest [Read Order]

The Jharkhand High Court has held that Goods and Services Tax ( GST) Input Tax Credit ( ITC ) is allowable even on Delayed filing Goods and Services Return GSTR-3B for the FY 2017-18, while directing a Refund of Penalty & Interest to the petitioner.

M/s. Ram Constructions, a proprietorship concern, having its place of business at Barkiray, Maheshpur, Pakur, Jharkhand, through its Proprietor filed the present writ petition for issuance of an appropriate writ, order or direction, holding and declaring Section 16(4) of the Central Goods and Services Tax Act, 2017 as ultra vires, inasmuch as, it seeks to restrict the availment of Input Tax Credit, within a time frame, which is being violative of Article 14, Article 19(1)(g) and Article 300A of the Constitution of India and also being violative of the basic structure of the Goods and Services Tax Act, 2017.

Complete Draft Replies of GST ITC Related Notices, Click Here

Further, the petitioner pleaded for issuance of an appropriate writ, order, direction, holding and declaring the amendment carried under Rule 61(5) of the Central Goods and Services Rules, 2017 inserted vide Clause 4(a) of Notification No. 49/2019 dated 9th October, 2019 issued by Respondent No.-2 Central Board of Indirect Taxes  and Customs (Annexure- 5) as ultra vires, by which GSTR-3B has been declared to be a return under Section 39 of the Central Goods and Services Act, 2017 with retrospective effect from 01.07.2017, as being wholly violative of Article 14, Article 19(1)(g) and Article 300A of the Constitution of India as it has the effect of interfering with the vested right of the petitioner to avail Input Tax Credit.

The petitioners also sought for issuance of a writ, order or direction in the nature of Prohibition, commanding the Respondents, their servants, agents and subordinates to forbear from giving any effect and acting on the basis of or in furtherance of the provisions of Section 16(4) of the Act and the rules made and notifications issued thereunder in any purported proceedings there under and from levying or collection of any tax on the basis thereof.

Further, the issuance of an appropriate writ, order, direction for quashing and setting aside the order dated 31.01.2023 along with DRC-07 dated 10.10.2023 was also sought for.

Hearing both sides, the Jharkhand Bench of Chief Justice noted that, In view of Clause (5) of Section 16 inserted by the Finance (No.2) Act, 2024, with effect from 01.07.2017, the respondents are directed to allow the petitioner to take Input Tax Credit in respect of delayed returns filed for the Financial Year 2017-18, and the interest and penalty levied on the petitioner by the respondents shall be refunded with 6% p.a interest from the date of such collection till the date of repayment.

Accordingly, the writ petition was disposed of by the Single Bench of Chief Justice M S Ramachandra Rao.

To Read the full text of the Order CLICK HERE

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