Taxpayer Seeks Input Tax Credit Under Section 140(5) of CGST Act for Extended Period Covering 20 Invoices

The HC disposed of the writ petition seeking direction to consider an application under Section 140(5) of the Central Goods and Services Act, 2017. The petitioner sought input tax credit for extended days, which was disallowed for 20 invoices totaling Rs.23,71,301. The court directed the first respondent to consider the petitioner's representation within three weeks and communicate the outcome, while clarifying that the pendency of this representation would not prevent the second respondent from proceeding with the show cause notice.

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Issues:
1. Writ of Mandamus seeking direction to consider and pass order on petition/application under Section 140(5) of the Central Goods and Services Act, 2017 within stipulated time.

Analysis:
The petitioner filed a writ petition seeking a Writ of Mandamus directing the first respondent to consider and pass an order on the petition/application dated 12.05.2022 under Section 140(5) of the Central Goods and Services Act, 2017 within the time stipulated by the Court. The petitioner's grievance was related to an application made to the first respondent for input credit for extended days as per Section 140(5) of the Act. The second respondent had issued a show cause notice disallowing credit for 20 invoices, amounting to Rs.23,71,301, on the grounds that the entries were not made from the appointed date of 01.07.2017, making the petitioner ineligible for input credit.

According to the petitioner, Section 140(5) allows for an initial thirty-day period for taking credit, with the possibility of an extended period for another thirty days. The disallowed credit pertained to the second period, and the petitioner claimed entitlement to the credit. The petitioner argued that the show cause notice issued after three years was improper, and the first respondent should consider the representation to render the notice irrelevant. The respondents' counsel contended that the petition was premature at the show cause notice stage, advising the petitioner to respond to the notice with relevant records for a personal hearing to present their case.

The Court disposed of the Writ Petition without costs, instructing the first respondent to consider the petitioner's representation within three weeks and communicate the outcome. It clarified that the pendency of the representation would not impede the second respondent from proceeding with the show cause notice for further action. The judgment balanced the petitioner's request for timely consideration with the procedural requirements of responding to the show cause notice, ensuring a fair opportunity for the petitioner to present their case before any further action is taken.

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