A retrospective beneficial amendment is applicable for past as well as current cases.

This article is on the newly inserted sub-section 5 of section 16 on 27/09/2024. This sub section reads as "Notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed up to the thirtieth day of November, 2021". This is a highly beneficial amendment brought after careful thought to minimise the past, present as well as future damages to the taxpayer. However, CBIC vide their circular number 237/31/2024 GST dated 15/10/2024 clarified that Further, it has been provided in section 150 of the Finance (No.2) Act, 2024 (reproduced below), that no refund of any tax paid or the input tax credit reversed shall be granted on account of the said retrospective insertion of sub-section (5) and sub-section (6) of section 16 of the CGST Act. "150. No refund shall be made of all the tax paid or the input tax credit reversed, which would not have been so paid, or not reversed, had section 118 been in force at all material times."

The sub section was inserted on 27/09/2024 only but with retrospective effect from 01/07/2017 itself and made applicable up to 2020-21 provided the returns were filed latest by 30/11/2021. This has led to an anomaly as the due date for passing the OIO up to 2018-19 already ended on 30/04/2024 itself. It seriously affected one section of taxpayers for whom OIO up to 31/03/2019 were already passed without any such benefit as applicable under sub -section 5 whereas the other section of taxpayer stand as a beneficiary. The Government has only after careful thought brought this amendment and made it applicable with effect from 01/07/2027 itself.

Under the above circumstances, one of our friend Mr. Manash Ghosh got the OIO on 19/04/2024, before introduction of sub section and demand of Rs. 1,18,35,089 was confirmed. As this is unfair on the part of the Government to give benefit for one section and deny the same benefit for the other section, the taxpayer preferred a writ in the jurisdictional high court. The Counsel for respondent vehemently argued that the writ must be dismissed. This argument is understandable, as if one case which is decided prior to such amendment date is given this benefit, many other taxpayers may follow suit. However, the High Court as reported in Manash Ghosh Versus Assistant Commissioner Of Revenue, Baharampur Charge And Ors. - 2026 (9) TMI 1031 - CALCUTTA HIGH COURT  ruled as " 13. This Court finds that by virtue of the inserted clause, as amended in Section 16, the petitioner cannot be denied the benefit of such amendment. The amendment is curative and retrospective from 01.07.2017".

In addition, para 16 reads as "The order in original dated 19.04.2024 shall be re-adjudicated by the Joint Commissioner in light of Section 16(5) of the said Act within 6 weeks after verifying the date of filing GSTR 3B. The respondent authorities are restrained from taking any coercive steps till the date of re-adjudication".

Key Take Aways: All taxpayers, who suffered on account of non- availability of sub section 5 of section 16 prior to 27/09/2024 also stand to gain by virtue of the above judgements. But, there is a catch under limitation. Accordingly, all cases where the dispute is live as on date at adjudication level or first appeal level or second appeal level or by way of writ before jurisdictional high court should take appropriate advantages as above.

There is a series of judgements identical to the above from various high courts which may be referred in all applicable cases.

One High Court has passed several such orders. Many other high courts also have ruled on similar lines. As only around 80,000 appeals have reached GSTAT portal and the deadline for legacy appeals including condonation of delay is ending soon, taxpayers and tax professionals are suggested to take a quick stock on the following to consider the second appeal appropriately.

Checklist:

1. Whether the show cause notice was issued in time and invocation of 73 or 74 or 74A is done correctly?
2. In case only portal upload of notice and no reply was filed to show cause notice, any other mode of communication also used?
3. Whether the opportunity of personal hearing was offered?
4. Whether sub section 7 of section 75 on quantum of demand confirmed in OIO is not more than the one proposed in SCN?.
5. In case of section 74 cases, check CBIC Instructions dated 13/12/2023, Supreme Court decision of GMR Infra Projects as well as Tata cases during August 2026.
6. Is the demand merely based on GSTR differences without proper reconciliation?
7. Does the demand pertain to tax head mismatch?.

All appeals filed with proper justifications for the condonation of delay within the condonable period have good chances of admission.

Be that as it may, condonation of delay is the last resort and taxpayers getting OIA dated August as well as September 2026 are suggested to prefer second appeal, if need be, immediately without waiting for last minute.