Taxpayer entitled to file rectification application for wrongly denied input tax credit under Section 16(5) CGST Act

The HC disposed of the writ petition concerning denial of input tax credit for three months in assessment year 2018-19. The Court acknowledged provisions of Section 16(5) of CGST Act and Central Government circular allowing rectification applications. The petitioner was held entitled to file rectification application within stipulated timeframe for consideration of input tax credit claim made in returns. The rectification would be considered per Section 16(5) provisions and Government circular directions, affirming taxpayer's right to seek rectification of wrongly denied input tax credits.

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Issues:
Denial of input tax claim in assessment order for three months in the assessment year 2018-19; Interpretation of Section 16(5) of the CGST Act regarding input tax credit; Application of circular issued by the Government of India for rectification of order under special procedure.

Analysis:
The judgment concerns the denial of input tax claim in an assessment order for three months in the assessment year 2018-19. The petitioner's main contention was the rejection of input tax credit. The petitioner relied on Section 16(5) of the CGST Act, which allows for the input tax credit pertaining to specific financial years until a specified date. Additionally, a circular issued by the Government of India, specifically Clause 3.5 and 3.5.1, provided a procedure for rectification of orders confirming the demand for wrong availment of input tax credit. The circular allowed taxpayers to apply for rectification within a specified period from the date of issuance of the notification.

The Court acknowledged the provisions of Section 16(5) of the CGST Act and the directions issued by the Central Government through the circular. It concluded that the petitioner would be entitled to file a rectification application for consideration of the input tax credit claim made in the returns filed within the stipulated time frame mentioned in the circular. The Court emphasized that the rectification application would be considered in accordance with the newly incorporated provisions under Section 16(5) of the CGST Act and the Circular of the Central Government.

The judgment ultimately disposed of the writ petition, affirming the petitioner's entitlement to file a rectification application within the specified time frame for the consideration of the input tax credit claim, in line with the provisions of Section 16(5) of the CGST Act and the circular issued by the Government of India.

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