In a significant ruling that offers relief to many GST-registered businesses, the Madras High Court has held that the delayed filing of GSTR-3B returns cannot be grounds for denying Input Tax Credit (ITC), following the retrospective amendment to the Central Goods and Services Tax (CGST) Act, 2017.
Case Background:
The petitioner, M/s Shanker Impexx, challenged an order dated 19.04.2023 issued by the Assistant Commissioner, which denied their claim for GST ITC due to the late filing of GSTR-3B. The petitioner’s counsel argued that the issue had already been settled by the court in a series of writ petitions, notably W.P. No. 25081 of 2024, dated 17.10.2024, and sought the same relief.
The Government Pleader acknowledged that the current case fell within the ambit of the earlier decision.
Court’s Observations:
Justice Krishnan Ramasamy, who presided over the matter, emphasized that similar concerns had been resolved in the earlier batch of writ petitions, including W.P. No. 25081 of 2024. In that batch, the petitioners had timely filed their GSTR-1 but were unable to file GSTR-3B due to uncontrollable factors such as financial difficulties during the COVID-19 lockdown, serious health issues, and even fire accidents. As a result, they missed the deadline to claim ITC, leading to reversals and demands for tax, interest, and penalties.
Legal and Policy Developments:
The 53rd GST Council Meeting held on 22.06.2024 played a pivotal role in this outcome. Based on its recommendations, the government extended the due date to claim ITC for the financial years 2017-18 to 2020-21 to 30.11.2021. This extension was given retrospective effect through the Finance Act (No. 2) of 2024, and was further clarified through official notifications and circulars.
Judgment Outcome:
Taking these legislative changes into account, the Madras High Court quashed the impugned orders and directed the tax authorities not to pursue the matter based on the limitation period. Furthermore, the court instructed authorities to unfreeze bank accounts and ordered the refund or adjustment of any amount that had been recovered earlier.
Following the established legal precedent, the court allowed the present Writ Petition, affirming that the case involved the same legal question already adjudicated upon.
Case Title: M/s Shanker Impexx vs. The Assistant Commissioner
Writ Petition No.: W.P. No. 9196 of 2024
Date of Judgment: [Date not specified]
Key Takeaway:
This ruling reaffirms that, due to retrospective legislative changes, late filing of GSTR-3B alone cannot lead to denial of ITC, provided GSTR-1 was filed on time and valid reasons existed for the delay. Businesses affected by similar rejections can now seek relief based on this judgment.
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