Refund rejection set aside as retrospective insertion of Section 16(5) extended ITC availment deadline till 30th November 2021

Case Details

Case Title: DYS Impex Private Limited v. Assistant Commissioner of Revenue, State Tax, Refund Unit & Ors.
Court: High Court at Calcutta, Constitutional Writ Jurisdiction, Appellate Side
Petition No.: WPA 2980 of 2025
Date of Judgment: 25 June 2025
Category of Dispute: Refund – Input Tax Credit (ITC) disallowance due to time limitation
Relevant Sections: Section 16(4), Section 16(5), Section 39 of the CGST/WBGST Act, 2017

Facts (Para 2–3)

The petitioner, DYS Impex Pvt Ltd., challenged the refund rejection order issued in Form GST RFT-06 for July–September 2019. The refund was partly disallowed on the ground that ITC pertaining to FY 2017–18 was claimed belatedly, relying on the proviso to Section 16(4). The appellate authority also upheld the rejection by observing that the ITC claim was time-barred. The petitioner contended that with the insertion of Section 16(5), the time for availing ITC for FYs 2017–18 to 2020–21 stood extended till 30 November 2021.

Questions before the Court (Para 2–4)

• Whether the refund rejection on the ground of limitation under Section 16(4) was valid despite the retrospective insertion of Section 16(5).

• Whether the authorities were bound to reappraise refund eligibility considering the extended ITC window provided by Section 16(5).

Observations (Para 4–5)

The Court noted that both the proper officer and the appellate authority disallowed refund based on Section 16(4). However, the statutory landscape had changed with retrospective insertion of Section 16(5) (w.e.f. 1 July 2017), which specifically permitted ITC availment for FYs 2017–18 to 2020–21 in any return filed up to 30 November 2021. Thus, the very foundation of the refund rejection was rendered unsustainable.

Judgment (Para 5–7)

The Court held that the orders of the proper officer (dated 14 April 2023) and appellate authority (dated 21 February 2024) could not stand in law. Both were set aside, and the matter was remanded back to the proper officer for re-adjudication considering Section 16(5). The officer was directed to complete proceedings within 12 weeks.

Table – Cases Referred

Between Fine Lines

For trade and industry, this judgment is a reassurance that refund claims wrongly denied under Section 16(4) must be reconsidered in light of Section 16(5). Businesses that filed returns up to 30 November 2021, even for past financial years, cannot be denied ITC or refunds merely due to earlier cut-off restrictions.

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