Retrospective Section 16(5) Amendment Regularizes Input Tax Credit for Returns Filed by November 30, 2021

The petitioner challenged an order dated April 29, 2024, issued under Section 73 of the CGST Act for the assessment year (AY) 2018-19.

Previously, an order-in-original dated March 6, 2023, had imposed a demand of ₹4,22,88,416/- on the petitioner for the period 2017-18 to 2019-20.

The petitioner had filed GSTR-3B returns for July 2018 to March 2020 after the due date but before November 30, 2021.

The Revenue contended that the April 2024 order was a rectification of the 2023 order and that the petitioner failed to prove compliance with the timeline for the new statutory amendment.

The court applied Section 16(5) of the CGST Act, 2017, inserted via the Finance (No. 2) Act, 2024, which retrospectively regularizes Input Tax Credit (ITC) for FY 2017-18 to 2020-21 provided returns were filed by November 30, 2021.

It also relied on the precedent Hiranmoy Dutta vs. State of West Bengal [2025] 172 taxmann.com 750 (Calcutta), which held that taxpayers cannot be denied the benefit of the curative amendment if returns were filed within the new statutory cut-off.

The court found that Section 16(5) is a curative and retrospective provision effective from July 1, 2017.

While the Revenue argued that the assessment was concluded and the amendment could not reopen it, the court determined that the petitioner had made a prima facie case that their returns (filed before Nov 30, 2021) fell within the protected window.

Applying the ratio of Hiranmoy Dutta, the court reasoned that the denial of ITC was illegal because the amendment specifically intended to regularize delayed filings for the subject periods.

Consequently, the order dated April 29, 2024, which ignored this retrospective benefit, was found unsustainable.

It held that the petitioner is entitled to the benefit of the amendment under Section 16(5) if the filing dates are verified.

The Joint Commissioner was directed to re-adjudicate the original order dated March 6, 2023, within six weeks, specifically to verify the GSTR-3B filing dates and apply the statutory benefit. Coercive steps were restrained pending re-adjudication.