ITC Benefit Under Section 16(6) Inapplicable if Input Tax Credit Was Already Time-Barred Under Section 16(4)

The petitioner, a proprietary concern, challenged an order (Form DRC-07) dated 10.02.2025 passed under Section 73 of the Tamil Nadu Goods and Service Tax (TNGST) Act, 2017 for the financial year 2020-21

The petitioner’s GST registration had been cancelled on 28.03.2022

The petitioner sought to claim Input Tax Credit (ITC) by invoking the extension provided under Section 16(6) of the GST Act, arguing that the time limit for filing returns is extended following the revocation of a cancellation

The Revenue contested this, stating the petitioner was ineligible as it did not satisfy the statutory pre-conditions

1. Whether the petitioner is entitled to claim Input Tax Credit (ITC) under the benefit of Section 16(6) of the GST Act after the revocation of registration cancellation

2. Whether the restriction under Section 16(4) precludes the application of the extension granted under Section 16(6) if the ITC entitlement had already expired on the date of cancellation

The Court applied Section 16 of the TNGST/CGST Act, 2017, specifically sub-sections (4) and (6)

Section 16(4) establishes the standard time limit for availing ITC

Section 16(6) provides a relaxation for persons whose registration was cancelled and subsequently revoked, allowing them to file returns for the period of cancellation within 30 days of revocation

However, this is subject to the proviso that the availment of ITC must not have been restricted under sub-section (4) on the date of the order of cancellation

The Court analyzed the interplay between Section 16(4) and 16(6). It noted that Section 16(6) is not an absolute extension but contains an express pre-condition: the ITC in question must not have been already time-barred under Section 16(4) at the time the registration was cancelled

The rationale is to protect taxpayers from losing ITC benefits solely because they were unable to file returns during the subsistence of a cancellation, but it does not revive credits that were already ineligible before the cancellation occurred

Upon reviewing the facts, the Court found that the petitioner’s claim for ITC was already restricted by Section 16(4) on the date their registration was cancelled

Consequently, the petitioner could not invoke the "30-day from revocation" rule because the foundational eligibility for the credit had lapsed

The Writ Petition was dismissed, and the impugned order dated 10.02.2025 was upheld. No costs were awarded, and connected miscellaneous petitions were closed