GDT ITC Time Limit Extended till 30 November 2021 Applies to FY 2018-19: Gauhati HC sets aside Demand [Read Order]

In a recent ruling, the Gauhati High Court held that the extended time limit for availing Input Tax Credit (ITC) up to 30 November 2021 applies to the financial year 2018-19 and on that basis, set aside the Goods and Services Tax (GST) demand raised against the taxpayer.

Saurabh Agarwalla, the petitioner, filed a writ petition challenging the Demand-cum-Show Cause Notice dated 20.10.2023 and the subsequent Order-in-Original dated 07.02.2024 passed under the CGST Act, 2017. The notice alleged that the petitioner had wrongly availed ITC amounting to Rs. 2,38,928 for the financial year 2018-19 in violation of Section 16(4) of the CGST Act, as the credit was claimed beyond the prescribed time limit.

Pursuant to the show cause notice, the department passed an Order-in-Original confirming a demand of Rs. 2,49,142, along with interest of Rs. 553 and a penalty of Rs. 24,914.

The petitioner’s counsel argued that after the passing of the Order-in-Original, sub-sections (5) and (6) were inserted in Section 16 of the CGST Act, which extended the time limit for availing ITC for financial years including 2018-19 up to 30 November 2021. It was argued that in view of this amendment, the petitioner was entitled to avail ITC for the relevant period and the demand raised could not be sustained.

The respondents’ counsel argued that the matter could be resolved if the petitioner pays Rs. 10,214/- as excess utilized amount along with Rs. 553 as interest. The petitioner accepted this position and did not object to making the payment.

Justice Anjan Moni Kalita observed that the amendment to Section 16 clearly provides that notwithstanding the earlier limitation under Section 16(4), ITC for the financial years including 2018-19 can be availed in returns filed up to 30 November 2021.

The court explained that in light of this amendment, the basis of the demand raised against the petitioner no longer survives and the petitioner is entitled to the benefit of the extended time limit. The court held that the Order-in-Original dated 07.02.2024 could not be sustained in view of the amended provision.

The court set aside the Order-in-Original and disposed of the writ petition with a direction to the petitioner to pay Rs. 10,214 along with Rs. 553 as interest within 30 days from receipt of the order. The writ petition was disposed of accordingly.

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