Vinod Udaipuri vs Union Of India on 18 September, 2025

Judgment Summary: Vinod Udaipuri vs Union Of India

W.P. (T) No. 5267 of 2023 | High Court of Jharkhand at Ranchi | Date: 18.09.2025

1. Outcome

The writ petition was allowed. The impugned Order-in-Original dated 19.05.2023 and the consequential Summary of Order (DRC-07) dated 25.08.2023 were quashed and set aside. The matter was remanded back to the adjudicating authority for a fresh decision to be made within two months, specifically considering the newly inserted Section 16(5) of the CGST Act, 2017.

2. Core Issue

The primary issue was the disallowance of Input Tax Credit (ITC) of ₹30,29,010 for the period July 2018 to March 2019, on the grounds that the petitioner had availed it beyond the statutory time limit prescribed under Section 16(4) of the CGST Act, 2017.

While the petitioner initially challenged the constitutional validity of Section 16(4) itself, the case was ultimately decided based on a subsequent legislative amendment that extended the time limit for availing ITC for the period in question.

3. Key Facts

• The petitioner, Vinod Udaipuri, was issued an Order-in-Original disallowing ITC amounting to ₹30,29,010/- for the financial year 2018-19.
• The disallowance was based on the premise that the ITC was claimed after the due date stipulated in Section 16(4) of the CGST Act.
• Consequently, a demand for the disallowed ITC, along with interest and penalty, was raised against the petitioner.
• The petitioner filed a writ petition challenging the order and also the constitutional validity of Section 16(4) of the CGST Act and the retrospective amendment to Rule 61(5) of the CGST Rules.
• During the pendency of the petition, the Finance Act, 2024, introduced a new sub-section (5) to Section 16 of the CGST Act with retrospective effect from July 1, 2017. This new provision provided an extended timeline for availing ITC for the financial years 2017-18 to 2020-21.

4. Arguments

• Petitioner's Counsel (Mr. Sumeet Gadodia):
  Argued that in light of the new Section 16(5), inserted via Section 118 of the Finance Act, 2024, the basis of the impugned order no longer stood. He contended that the matter required fresh adjudication considering this new, retrospectively applicable provision. He prayed for the order to be quashed and the case remanded.

• Respondents' Counsel (Mr. Amit Kumar, Sr. S.C. for CGST):
  Conceded to the petitioner's argument. He acknowledged the insertion of Section 16(5) by the Finance Act, 2024, and agreed that the matter needed to be adjudicated afresh in view of this legislative change.

5. Court’s Reasoning

• The High Court noted that the impugned order was passed solely on the grounds of contravention of Section 16(4) of the CGST Act.
• The Court took judicial notice of the amendment made by Section 118 of the Finance Act, 2024, which inserted Section 16(5). This new sub-section begins with a non-obstante clause ("Notwithstanding anything contained in sub-section (4)...") and specifically allows registered persons to take ITC for FY 2017-18, 2018-19, 2019-20, and 2020-21 in any return filed up to November 30, 2021.
• The Court emphasized that this amendment was given retrospective effect from July 1, 2017.
• Therefore, the adjudicating authority had passed the original order without the benefit of this new, retrospectively effective legal provision.
• Considering that both parties, including the Union of India, consented that the matter required fresh consideration, the Court deemed it appropriate to quash the existing order and remand the case for a new decision based on the amended law.
• The Court clarified that it had not expressed any opinion on the merits of the case.

6. Statutory References

• Central Goods and Services Tax (CGST) Act, 2017:
  • Section 16(4): The provision prescribing the time limit for availing ITC (the original basis for disallowance).
  • Section 16(5): The new provision inserted by the Finance Act, 2024, extending the time limit for FY 2017-18 to 2020-21.
  • Section 39: Provision for furnishing of returns.
  • Section 50: Provision for interest on delayed tax payment.
  • Section 122(2)(a): Provision for penalty.
• Central Goods and Services Tax (CGST) Rules, 2017:
  • Rule 61(5): Regarding GSTR-3B being treated as a return under Section 39.
• Constitution of India:
  • Article 14, 19(1)(g), 226, and 300A (Cited in the prayer of the writ petition).
• Other Legislation:
  • Finance Act, 2024 (Section 118): The Act that introduced Section 16(5) into the CGST Act.

7. Precedents Cited

No judicial precedents were cited or relied upon by the High Court in this judgment. The decision was based entirely on the application of a new statutory amendment.