Madras HC Rejects GST S. 16(4) Plea in Wrongful ITC Availment Issue, Directs Appeal as Proper Remedy [Read Order]

The Madras High Court has dismissed a writ petition challenging a GST ( Goods and Services Tax ) order on alleged wrongful availment of Input Tax Credit ( ITC ), holding that the dispute did not fall under Section 16(4) of the GST Act and that the proper remedy lay in filing an appeal.

The petitioner, Tvl. Suyambulingam Stores, had approached the Court seeking to quash an order dated 25 February 2025 passed by the Deputy State Tax Officer, Nanganallur Assessment Circle.

The proceedings involved four issues, excess ITC claimed in GSTR-3B compared to supplier declarations, ITC to be reversed on non-business and exempt transactions, under-declaration of ineligible ITC, and late fee liability.

The petitioner contended that a detailed reply to the Show Cause Notice had been filed but was not duly considered.

The counsel also sought to rely on an earlier Madras High Court decision relating to Section 16(4) of the CGST Act, which sets time limits for availing ITC.

However, Justice Krishnan Ramasamy observed that the present case did not involve the time-limit restriction under Section 16(4), but rather allegations of wrongful ITC availment. The Court noted that the assessment order explicitly recorded and addressed the petitioner’s reply.

The bench held that “If the petitioner is still aggrieved over the impugned assessment order, it is up to the petitioner to convince the Appellate Authority on the said ground by way of filing an appeal.”

Accordingly, the petition was dismissed.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates