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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether input tax credit could be availed notwithstanding the limitation in Section 16(4) of the Central Goods and Services Tax Act, 2017, in view of the retrospective insertion of Section 16(5) of that Act.
Analysis: The petitions concerned entitlement to avail input tax credit for GSTR-3B filings relating to financial years 2017-18, 2018-19, 2019-20 and 2020-21. The Court noted that Section 16 of the Central Goods and Services Tax Act, 2017 was amended by insertion of sub-section (5) with retrospective effect from 01.07.2017, and that the petitioners had filed the returns on or before 30.11.2021. In that backdrop, the earlier limitation-based objections under Section 16(4) could not defeat the claim.
Conclusion: The petitioners were held entitled to avail input tax credit for the relevant financial years, and the contrary orders were quashed and set aside.
Final Conclusion: The challenge succeeded on the ITC limitation issue, and the petitions were disposed of in favour of the petitioners with liberty to avail the benefits under the cited circular.
Ratio Decidendi: A retrospective statutory amendment conferring entitlement to input tax credit prevails over the prior limitation bar, where the claim falls within the amended regime.
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