In a recent decision the Andhra Pradesh High Court ruled that the Time limit for filing Input Tax Credit (ITC) under the Andhra Pradesh General Sales Tax Act, 2017 (APGST Act) is not ultravires the Constitution of India and mere acceptance of Form GSTR-3B returns will not release delay in filing ITC.
The Petitioner is a sole proprietorship doing business in hardware and plywood with the trade name “Tirumalakonda Plywoods” commenced during Covid-19 pandemic and registered under APGST Act and CGST Act during March, 2020. While so, petitioner received email under Section 74(1) of State Goods and Services Tax (SGST) / Central Goods and Services Tax (CGST) Act r/w Section 20 of Integrated Goods and Services Tax (IGST) Act, 2017 by the first respondent stating that the petitioner availed input for March, 2020 and sought reply in the light of Gazette notification.
Though the notice was sent through a private gmail ID and not following the procedure under rule 142 (1) of APGST Rules, 2017 and not served through its GST common portal or specified any time for reply as per Form GST DRC-01, still the petitioner submitted reply through e-mail with its Form GST DRC-06 and enclosed Annexure-I wherein the petitioner sought an opportunity under Section 74(5) of APGST Act, 2017, since the petitioner not only discharged late fee for delay in filing the return but also challenged notice with his detailed submissions.
The main issues for consideration were: (1) Whether by virtue of imposition of time limit for claiming Input Tax Credit (ITC), Section 16(4) of the APGST Act and CGST Act, 2017 violated Article 14, 19(1)(g) and 300A of the Constitution of India and thereby, liable to be struck down?
(2) Whether Section 16(2) of the APGST / CGST Act, 2017 would prevail over 16(4) of APGST / CGST Act, 2017 and thereby if the conditions laid down in Section 16(2) of the APGST / CGST Act, 2017 are fulfilled, the time limit prescribed under Section 16(4) of the APGST / CGST Act, 2017 for claiming ITC will pale into insignificance?
(3) Whether the acceptance of Form GSTR-3B returns of March 2020 filed on 27.11.2020 by the petitioner with a late fee of Rs.10,000/- will exonerate the delay in claiming the ITC beyond the period specified under Section 16(4) of the APGST / CGST Act, 2017?
A Division Bench comprising Justices U Durga Prasad Rao and T Mallikarjuna Rao held that the time limit prescribed for claiming ITC under Section 16(4) of APGST Act/CGST Act, 2017 is not violative of Articles 14, 19(1)(g) and 300-A of the Constitution of India. Section 16(2) of APGST/CGST Act, 2017 has no overriding effect on Section 16(4) of the said Act as both are not contradictory with each other. They will operate independently.
The Court further went on to add that mere acceptance of Form GSTR-3B returns with late fee will not exonerate the delay in claiming ITC beyond the period specified U/s 16(4) of APGST/CGST Act, 2017.
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