Section 16(5) protects FY 2017–21 ITC claims filed by 30 November 2021 from limitation-based denial.

Annamalai and Co, a registered partnership firm, challenged the respondent’s Order-in-Original dated 29 August 2024 for FY 2019–20, which reversed or denied its input tax credit (ITC) claim and directed payment of tax, penalty and interest.

The petitioner submitted that the limitation issue was covered by the Madras High Court’s common order dated 17 October 2024 in W.P. Nos. 25081 of 2023, etc., and the respondent fairly accepted that submission.

1. Whether the impugned order was liable to be quashed insofar as it denied ITC on the ground of limitation under Section 16(4), where the claim fell within the extended period provided by Section 16(5) of the CGST Act.

2. Whether the Department could pursue any distinct allegations concerning the correctness or eligibility of the ITC claim.

Section 16(4) of the CGST Act generally bars ITC claims after the statutory deadline.

Section 16(5), notwithstanding Section 16(4), entitles registered persons to claim ITC relating to FYs 2017–18 to 2020–21 in a return under Section 39 filed by 30 November 2021.

Applying its earlier common order in W.P. Nos. 25081 of 2023, etc., the Court treated Section 16(5) as retrospectively applicable from 1 July 2017 and held that orders based on Section 16(4) limitation could not stand to the extent the claims were within Section 16(5)’s prescribed period.

The dispute was presented as involving the same limitation issue addressed in the earlier batch decision, and the respondent accepted that the earlier order governed.

Applying Section 16(5) and that precedent, the Court set aside the impugned order only insofar as it denied ITC on limitation grounds where the claim was within the period prescribed by Section 16(5).

It preserved the Department’s ability to proceed in accordance with law on separate issues, including discrepancies, wrong or excess availment, or fake ITC claims.

The Department was directed to take steps to de-freeze any bank account frozen pursuant to the order and to discontinue proposed recovery proceedings during the writ proceedings upon production of the judgment.

Any amounts collected or deposited in the petitioner’s cash or credit ledgers were to be refunded or permitted to be used or adjusted towards future tax.

The Department retained liberty to pursue any distinct ITC-related issues in accordance with law.

No costs; the connected miscellaneous petition was closed.