Case Of: M/s Anand Steel
Issued By: Madhya Pradesh High Court
Order No: W.P. 2164 of 2024
Date: 22nd November 2024
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The petitioner, a proprietorship firm, had filed the required GST returns for the 2018-19 period but was served a notice proposing disallowance of
ITC due to the delay in filing.
The petitioner argued that the application of Section 16(4) of the CGST Act, which imposes a time limit for claiming ITC, was unreasonable and
violated constitutional provisions, including Article 14 (right to equality).
The issue was whether ITC should be denied solely because of the delay in filing, even though the taxpayer had complied with other requirements and paid late fees and interest for the delay.
The Court reviewed Section 16(2) of the CGST Act, which grants taxpayers the right to claim ITC once they fulfill the conditions stipulated in Sections 16(1) and (2), irrespective of filing delays.
It observed that Section 16(4), which imposes a time limit for claiming ITC, should not override the taxpayer’s legitimate right to ITC if the basic conditions are met.
The Court emphasized that the payment of late fees and interest already acted as a deterrent, and denying ITC again was excessive and unjust.
The Court set aside the show-cause notices and assessment orders, instructing the authorities to reconsider the matter in light of the Finance Act amendments of 2024, which aimed to address such issues.