HC: Disallowance of ITC for period July 2018–March 2019 remanded as Section 16(5) stipulation not considered{ Vinod Udaipuri vs. Union of India [2025] 179 taxmann.com 106 (Jharkhand)}
Facts:
Petitioner had claimed Input Tax Credit for the period July 2018 to March 2019. The department disallowed the ITC by invoking Section 16(4) of the CGST Act, citing delay in availing credit, and raised demand with interest and penalty. The petitioner challenged the disallowance, contending that the claim was wrongly rejected and that subsequent legal changes particularly the insertion of Section 16(5) by the Finance Act, 2024 allowed ITC for invoices relating to FY 2017-18 to 2020-21 if returns were filed up to 30 November 2021.
Issue:
Whether the disallowance of ITC for July 2018–March 2019 was valid when the adjudicating authority did not consider the effect of Section 16(5), which provides a specific relaxation for availing ITC for the relevant financial years.
Held:
The Jharkhand High Court set aside the order disallowing ITC for July 2018–March 2019 and remanded the matter back to the department. The Court held that the adjudicating authority had failed to consider the newly inserted Section 16(5) of the CGST Act, which specifically covers ITC for the years 2017-18 to 2020-21. The authority was directed to re-examine the claim afresh in light of this provision, and no view was expressed on the merits of the ITC entitlement.
