ITC Allowed on Delayed Returns as Section 16(5) Applies Retrospectively

Case Summary

Case Title: M/s M. India Enterprises v. Principal Commissioner, CGST & Central Excise
Court Name: High Court of Jharkhand at Ranchi
Petition No.: W.P.(T) No. 3123 of 2024
Category of Dispute: Input Tax Credit
Date of Judgement: 09.04.2025
Relevant Sections: Section 16(5) of CGST Act (as amended by Finance (No. 2) Act, 2024), CBIC Circular dated 15.10.2024
Bench: Hon’ble Chief Justice M.S. Ramachandra Rao & Hon’ble Justice Deepak Roshan

Facts of the Case

(Para 1)
The petitioner, M/s M. India Enterprises, a proprietary concern, filed returns belatedly for the period June 2018 to March 2019. The department disallowed Input Tax Credit (ITC) claimed in such delayed returns based on the pre-amended provisions of Section 16(4) of the CGST Act, 2017.

Question(s) in Consideration

(Para 2)
Whether the petitioner is entitled to ITC in respect of returns filed belatedly for FY 2018–19 in light of the retrospective insertion of Section 16(5) by the Finance (No. 2) Act, 2024 and the CBIC Circular dated 15.10.2024.

Observations of the Court

(Para 2)
The Court took cognizance of the newly inserted clause (5) of Section 16, which allows ITC on belated returns for FYs 2017–18 to 2021–22, and noted that the circular issued by the CBIC on 15.10.2024 clearly directed authorities to allow such credits retrospectively. The impugned orders (Annexure-2 and 4) that had disallowed such ITC were found to be inconsistent with the updated legal position.

Judgment of the Court

(Para 2-3)
The High Court set aside the impugned orders denying ITC and directed the department to allow the petitioner to claim ITC for the delayed returns of June 2018 to March 2019. The writ petition was accordingly disposed of.

Between Fine Lines

• GST Council amended Section 16 to relax ITC timelines retrospectively.

• The CBIC clarified that belated returns for FYs 2017–18 to 2021–22 will qualify for ITC.

• Courts are upholding these directions and granting relief to taxpayers.

• Procedural delay in filing return will not lead to denial of ITC anymore.

• M/s M. India Enterprises gets relief under this retrospective relaxation.

Summary of Referred Cases

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