2026 (2) TMI 723 - HC - GST

Input Tax Credit rectification: directed respondent to hear and decide the rectification application on merits within a fixed timeframe.

Directed the 2nd respondent to consider and decide the petitioner's rectification application dated 11 December 2025 on merits and in accordance with law ... Retrospective amendment permitting belated Input Tax Credit - Input Tax Credit entitlement for Financial Year 2017-2018 - Rectification application for availing retrospective benefit - Applicability of administrative circular prescribing limitation for rectification - Judicial mandamus to adjudicate rectification applications - HELD THAT:- The petitioner’s contention about Circular dated 15th October, 2024 or the period of limitation prescribed therein not being applicable to the petitioner’s case or generally not binding upon a taxpayer, given the statutory provisions, are specifically kept open, and the same may also be addressed by the 2nd respondent when disposing of the petitioner’s rectification application dated 11th December, 2025. The 2nd respondent should afford the petitioner an opportunity of hearing and pass a reasoned order disposing of the aforesaid rectification application within a timeline now directed by us. All contentions of the parties, however, remain open for the decision of the 2nd respondent in the first instance. If the petitioner is aggrieved by the 2nd respondent’s decision, the petitioner will be at liberty to challenge such a decision along with the impugned order-in-original, in accordance with law and the prescribed procedures. This petition is disposed of in the above terms without any order for costs. Issues: Whether the 2nd respondent is obliged to consider and dispose of the petitioner's rectification application dated 11th December, 2025 filed for grant of input tax credit in view of the retrospective insertion of Section 16(5) of the Central Goods and Services Tax Act, 2017 and related circulars.Analysis: The petition challenges an order-in-original rejecting input tax credit for 2017-18 issued under Section 73(9) of the Central Goods and Services Tax Act, 2017 read with Section 20 of the Integrated Goods and Services Tax Act, 2017. After the impugned order, Section 16(5) of the Central Goods and Services Tax Act, 2017 was inserted with retrospective effect (Finance Act, 2024) permitting input tax credit claims for specified financial years if returns were filed up to 30 November 2021; additionally, Circular No. 237/31/2024-GST dated 15.10.2024 contains a para (clause 3.5) prescribing a six-month period for seeking rectification to avail the retrospective amendment. The Court examined competing contentions: the petitioner's submission that the retrospective amendment potentially overturns the impugned rejection and the respondents' reliance on the circular and prescribed six-month rectification window. The Court did not decide the merits of the rectification claim or the applicability of the circular; instead, it confined itself to the procedural question whether the rectification application should be considered and directed the 2nd respondent to decide the application on merits and in accordance with law after affording hearing within a specified timeframe. The Court expressly left open substantive contentions including the applicability of the circular and limitation period for determination by the 2nd respondent.Conclusion: The Court directed issuance of a limited mandamus requiring the 2nd respondent to afford the petitioner an opportunity of hearing and to decide the rectification application dated 11th December, 2025 on its merits and in accordance with law within two months from uploading of the order; the petition is disposed of in these terms.