Introduction
A recent legal case where a petitioner challenged the denial of input tax credit (ITC) due to delayed availing. The case is particularly interesting given the backdrop of the Finance (No.2) Bill, 2024, which proposed amendments to the Goods and Services Tax (GST) laws.
The Case Summary
The petitioner, a registered person under the GST regime, had faced an assessment for the financial year 2018-2019. The primary dispute revolved around the delayed availing of ITC, which was deemed contrary to Section 16(4) of the GST Enactments.
The petitioner argued that the intention of the Parliament, as reflected in Clause 114 of the Finance (No.2) Bill, 2024, was to allow the benefit of ITC, not to deny it. This clause was introduced based on the recommendations of the GST Council in its 53rd Meeting.
On the other hand, the respondents, represented by the government, referred to Clause 146 of the same bill. They contended that the matter should be remitted back to the assessing authority for reconsideration in light of the proposed amendments to the GST laws.
Court's Ruling and Analysis
The court, considering the submissions from both sides, observed that the Parliament itself had recognized the issue of delayed ITC and addressed it in Clause 114 of the Finance (No.2) Bill, 2024. However, Clause 146 introduced a rider, indicating that refunds might not be granted for taxes paid or ITC reversed due to non-compliance with the provisions before the introduction of Clause 114.
Based on these considerations, the court set aside the impugned order and remitted the case back to the assessing authority. The authority was instructed to pass a fresh order after taking into account the amendments proposed in the Finance (No.2) Bill, 2024.
GST Case Law Mr. Kannan Mahalingam S/O. Mahalingam, Proprietor IN M/S. Kannan Marketing-Appellant Versus The Commissioner of GST and Central Excise
Citation-2024 TAXONATION 1909 (MADRAS)
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