Rectification directed as court held petitioner eligible for ITC benefit under Section 16(5) CGST Act

Case Summary

Case Title: M/s Gurudeep Engineering v. Union of India & Ors.
Court: High Court of Gujarat at Ahmedabad
Petition Number: R/Special Civil Application No. 2579 of 2025
Date of Judgment: 03.04.2025
Category of Dispute: Input Tax Credit (Rectification under Section 16(5))
Relevant Sections: Section 16(5) of the CGST Act, 2017; Notification No. 22/2024 dated 08.10.2024

Facts

The petitioner, M/s Gurudeep Engineering, challenged the inaction of the authorities in processing its rectification application related to input tax credit claims. The grievance arose because despite eligibility under Section 16(5) of the CGST Act, 2017, the authorities withheld rectification citing pendency of the writ petition and applicability of Notification No. 22/2024 dated 08.10.2024 (Para 16).

Questions

Whether the authorities can withhold processing of a rectification application for ITC merely due to pendency of the writ petition, despite clear eligibility under Section 16(5) of the CGST Act, 2017? (Para 16)

Observations

The Court noted that in the affidavit-in-reply, the respondents themselves admitted that the petitioner was eligible to avail ITC benefits under Section 16(5). However, rectification was not processed owing to pendency of the writ petition and the said notification (Para 16).

Judgment

The Court, without entering into the merits of the ITC claim, directed the respondents to decide the petitioner’s rectification application under Section 16(5) of the CGST Act, 2017. The writ petition was accordingly disposed of, and the notice discharged (Final Order).

Cases Referred (with outcome)

Between Fine Lines

For taxpayers, this ruling emphasizes that once eligibility for ITC under Section 16(5) is established, procedural pendency or technical delays like ongoing writ petitions cannot stall rectification. Businesses should proactively seek rectification orders and rely on such judicial precedents when authorities hold back decisions.

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