2024 (11) TMI 193 - HC - GST

Finance Act 2024 amendments make Covid-19 time extension challenge redundant, input tax credit benefits restored

Gauhati HC disposed of a writ petition challenging notifications extending time limits under Section 73 of CGST/AGST Act, 2017 due to Covid-19. The court ... Extension of time limits under Section 73 of the CGST/AGST Act, 2017 due to Covid-19 - 'force majeure' condition - Challenge to N/N. 09/2023-Central Tax dated 31.03.2023 and N/N. 56/2023-Central Tax dated 28.12.2023 extending the period of issuance of the orders u/s 73 of the CGST Act, 2017 - HELD THAT:- A careful perusal of the provisions revealed that notwithstanding anything contained under Section 16 (4) of the CGST Act, 2017 in respect of any invoice or debit note for supply of goods or services or both pertaining to 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 upto 30th day of November, 2021. Reading of these amended provisions reveal that the challenge made in the writ petition before this Court is no longer required to be addressed in view of the amendments brought in by the Finance (No. 2) Act, 2024. In view of the amendments brought in it is evident that the petitioner is entitled to avail the benefit of input tax credit for the relevant period. In view of the amendments brought in, the petitioners are entitled to get the claim of the input tax credit subject to the conditions prescribed in the newly inserted Section 16 (5) and Section 16 (6) of the CGST Act, 2017 [inserted by Finance (No. 2) Act, 2024]. In view of the amendments brought into the statute by the Finance (No. 2) Act, 2024 and which amendments have been given retrospective effect from 01.07.2017, the proceedings initiated against the petitioners by way of show-cause notice No. C. No. IV(09)95/SCN/CD&S/TECH-II/GHY-I/2023-24/8434 dated 28.12.2023 have been rendered redundant. Since the decision has already been taken that the same notification is required to be issued by the State Government, taking such submissions into account, this Court deems it proper to close the instant writ petition by setting aside the impugned order in original No. 192/AC/DIC-I/CGST/2023-24 dated 12.03.2024 passed by the respondent no. 4. The matter now stands remanded back to the competent jurisdictional officer to pass appropriate order - Petition disposed off by way of remand. Issues Involved:1. Extension of the due date for filing annual returns under Section 73 of the CGST/AGST Act, 2017 due to Covid-19 Pandemic.2. Invocation of 'force majeure' under Section 168A of the CGST Act, 2017 for extending time limits.3. Validity of notifications extending the period for issuance of orders under Section 73.4. Amendments to Section 16 of the CGST Act, 2017 and their retrospective effect.5. Entitlement to input tax credit under the amended provisions.Issue-wise Detailed Analysis:1. Extension of Due Date for Filing Annual Returns:The judgment discusses the requirement under Section 44 of the CGST/AGST Act, 2017 for assessees to file annual returns electronically in form GSTR-9 by the due date. For the financial year 2017-18, the original deadline was 31.12.2018, which was extended multiple times due to the Covid-19 Pandemic. The final extension for Assam was up to 07.02.2020. The extensions were made under the authority of Section 168A, which allows the government to extend deadlines under special circumstances.2. Invocation of 'Force Majeure' under Section 168A:Section 168A was invoked to justify extensions due to the Covid-19 Pandemic, which was considered a 'force majeure' condition. This provision allows the government to extend time limits for actions that cannot be completed due to such conditions. The petitioner challenged the continued use of 'force majeure' beyond 2022, arguing that the pandemic's impact had subsided, making further extensions unjustified.3. Validity of Notifications Extending Issuance Period of Orders:The petitioner contested notifications No. 09/2023-Central Tax and No. 56/2023-Central Tax, which extended the period for issuing orders under Section 73. The petitioner argued that the extensions were not bona fide, as the pandemic was no longer a valid reason. The court considered the petitioner's grievance but noted that the GST Council had recommended these extensions due to difficulties faced during the pandemic.4. Amendments to Section 16 of the CGST Act, 2017:The judgment highlights amendments to Section 16, which governs eligibility for input tax credit. The Finance (No. 2) Act, 2024 introduced sub-sections 5 and 6, allowing registered persons to claim input tax credit for financial years 2017-18 to 2020-21 in returns filed by 30th November 2021. The amendments took effect from 27.09.2024, with retrospective application from 01.07.2017.5. Entitlement to Input Tax Credit Under Amended Provisions:The court noted that the amendments to Section 16 rendered the petitioner's challenge moot, as the petitioner was now entitled to claim input tax credit for the relevant period. The amendments provided a legal basis for the petitioner's claims, subject to compliance with the conditions in the newly inserted sub-sections.Conclusion:The court concluded that the amendments to Section 16 addressed the petitioner's grievances, allowing the petitioner to claim input tax credit for the disputed period. Consequently, the court set aside the impugned order and remanded the matter to the competent jurisdictional officer for further action if necessary. The writ petition was disposed of in light of the statutory amendments and the retrospective effect granted by the Finance (No. 2) Act, 2024.