2025 (1) TMI 1425 - HC - GST

Landmark GST Ruling: Taxpayer Wins Challenge Against Assessment Order, Penalties Struck Down Under Section 16(5)

HC allowed petitioner's writ challenging GST assessment order. Court found penalties invalid due to statutory deadline extension under Section 16(5). ... Challenge to assessment order assessing the petitioner under Section 73(9) of the CGST Act apart from penalty and interest for the financial year 2018-19 - HELD THAT:- For the months of November 2018 upto March 2019, the petitioner ought to have, as per section 16(4), filed the returns by 20-10-2019. However petitioner filed the returns GSTR-3B only on 26.11.2019. Hence the claim for input tax credit availed by the petitioner was denied and the demand and penalty were imposed on them. After the introduction of Section 16(5), the time period for filing such returns has been extended upto 30.11.2021. If the return filed by the petitioner is taken into reckoning, there could be significant change in the appreciation of facts carried out in Ext.P1. In view of the above, the impugned order cannot be legally sustained, and it is required to be re-considered. The impugned order Ext. P1 dated 18-04-2024 is set aside and the first respondent is directed to pass fresh orders, within a period of three months from the date of receipt of a certified copy of this judgment, after taking note of the provisions contained in Section 16(5) of the CGST/SGST Act and after affording an opportunity of hearing to the petitioner - petition allowed. Petitioner challenged an order dated 18.04.2024 assessing it under Section 73(9) of the CGST Act with penalty and interest after denial of input tax credit under Section 16(4) for failure to file GSTR-3B within the prescribed time for FY 2018-19. The petitioner filed GSTR-3B for 11/2018-03/2019 on 26.11.2019. Subsequent enactment of Section 16(5) extended the time limit prescribed under Section 16(4) (extended up to 30.11.2021), which, if applied, would entitle the petitioner to the disputed input tax credit and alter the factual appreciation in Ext. P1. The court held that in view of Section 16(5) the impugned order could not be legally sustained and directed that 'impugned order Ext. P1 dated 18-04-2024 is set aside.' The matter is remitted: the first respondent is directed to pass fresh orders within three months from receipt of certified copy, after taking note of Section 16(5) and affording the petitioner an opportunity of hearing.