Andhra Pradesh HC Quashes ITC Denial, Recognises Extended GST Filing Timeline | Biz Flow Kit

The Andhra Pradesh High Court permitted the claim of ITC submitted within the extended due date of October 25, 2020, u/s 16(4) of the GST Act.

The issue is concerned with the refusal of Input Tax Credit (ITC) and making an addition of the same to Kameswari Agencies’ income, along with the levying of interest and penalties for the financial year 2019-2020, under the provisions of the Goods and Services Tax (GST) Act 2017.

The applicant mentioned that such demands were not legal, arbitrary, and unfair, as they were charged without furnishing a fair opportunity of hearing, showing a breach of the principles of natural justice.

The petitioner company claimed ITC for the periods of September 2019 and March 2020 in late October 2020. However, the tax authorities rejected the claim because it was filed after the due date of October 25, 2020, as stipulated in Section 16(4) of the GST Act.

During the hearing before the High Court, the petitioner argued that Section 16(5) of the GST Act provides an extended time limit for claiming ITC for certain financial years, including the tax period of 2019-2020. According to the provisions of this section, the claim could be made up until November 30, 2021.

The applicant cited that, “a claim for Input tax credit for the period 2019-2020. The said period is covered under Section 16(5), extracted above. Therefore, the petitioner had an extended time, up to 30.11.2021, to file the claims. As these claims were filed in the last week of October 2020, the said claims of the petitioner cannot be rejected on the ground of delayed filing.”

In the existing case, the ITC was claimed within the extended due date; therefore, rejection of the same was unexplained and was inappropriate under the law. When the Court analysed the case facts, it supported the claims shown by the applicant. The extended deadline flagged by the petitioner was indeed under the scope of Section 16(5). Thus claims rejection as per the delay was unjustified.

Consequently, the court set aside the earlier impugned orders issued via the tax authorities and held in favour of the applicant.