Heramba Narayan Panda vs The Commissioner Cgst & Cx on 29 July, 2025

Summary of Judgment: Heramba Narayan Panda vs The Commissioner Cgst & Cx

1. Outcome

The High Court disposed of the writ petition by directing the adjudicating authority (Superintendent, Central GST & Central Excise, Jajpur Range-III) to consider and dispose of the petitioner's pending application for rectification. This must be done within three weeks, in accordance with the law, after providing the petitioner an opportunity for a personal hearing. The Court remanded the matter for fresh consideration in light of a recent retrospective legislative amendment.

2. Core Issue

The central issue was whether the petitioner could avail the benefit of a retrospective amendment to Section 16 of the CGST Act, 2017, which extended the time limit for claiming Input Tax Credit (ITC) for the financial year 2018-19, even though an adverse order under Section 73 had already been passed disallowing such credit.

3. Key Facts

• Adverse Order: An Order-in-Original dated 23.04.2024 was passed against the petitioner under Section 73 of the GST Act for the tax period April 2018 to March 2019. It confirmed a demand of Rs. 6,58,980/- for availing ITC after the statutory due date prescribed under Section 16(4).
• Legislative Amendment: The Finance (No.2) Act, 2024, inserted a new sub-section (5) to Section 16 of the CGST Act with retrospective effect from 01.07.2017. This amendment allowed taxpayers to claim ITC for FY 2017-18 to 2020-21 in any return filed up to 30th November 2021.
• Rectification Procedure: Following the amendment, the CBIC issued a notification (15.10.2024) and a circular (15.10.2024) establishing a special procedure for taxpayers to apply for rectification of orders that had disallowed ITC on these grounds.
• Petitioner's Action: The petitioner attempted to file a rectification application on the GST portal but faced technical glitches. Consequently, they submitted the application via registered post, which was acknowledged by the department on 14.02.2025.
• Inaction by Authority: The authority did not act on the pending rectification application, prompting the petitioner to approach the High Court.

4. Arguments

• Petitioner's Counsel (Ms. Kananbala Roy Choudhury):

  • The demand was a technical one, arising from the late filing of GSTR-3B.
  • The newly inserted Section 16(5) of the CGST Act, being retrospective, regularizes the ITC availed by the petitioner and nullifies the basis of the impugned order.
  • The government has provided a specific mechanism (rectification) to give effect to this amendment, which the petitioner has duly followed.
  • The authority's failure to process the rectification application is denying the petitioner a statutory benefit.

• Respondent's Counsel (Mr. Avinash Kedia):

  • The counsel made a procedural concession, agreeing that if the petitioner's rectification application is pending, the authority can be directed by the Court to dispose of it in accordance with the law.

5. Court’s Reasoning

• The Court acknowledged that the basis of the original demand (disallowance of ITC under Section 16(4)) was directly addressed by the retrospective insertion of Section 16(5).
• It noted that the government had created a specific pathway via notification and circular for taxpayers to seek rectification of past orders affected by this amendment.
• The Court observed that the petitioner’s rectification application, filed on 14.02.2025, was pending before the authority.
• Rather than adjudicating on the merits of the petitioner's eligibility under the new law, the Court deemed it appropriate to direct the adjudicating authority to perform its statutory duty.
• The Court reasoned that the authority is the proper forum for the initial "fresh consideration" of the claim in light of the new legal provisions, subject to the petitioner meeting all other stipulated conditions.
• Therefore, the most expedient course of action was to remand the matter to the authority with a time-bound direction to decide on the pending application.

6. Statutory References

• Acts:
  • Central Goods and Services Act, 2017 (CGST Act)
  • Odisha Goods and Services Act, 2017 (OGST Act)
  • Finance (No.2) Act, 2024
• Sections of GST Act:
  • Section 16(4): Time limit for availing ITC.
  • Section 16(5): Newly inserted retrospective provision extending the time limit for ITC for FYs 2017-18 to 2020-21.
  • Section 39: Furnishing of returns.
  • Section 73: Determination of tax for non-fraud cases.
  • Section 74: Determination of tax for fraud cases.
  • Section 107: Appeals to Appellate Authority.
  • Section 108: Powers of Revisional Authority.
  • Section 148: Power to notify special procedures.
• Other References:
  • Notification No. CBIC-20006/20/2023-GST, dated 15.10.2024.
  • Circular No. F. No. CBIC-20001/6/2024-GST, dated 15.10.2024.

7. Precedents Cited

The petitioner's counsel referred to the following judgments:
1. Shiv Construction Company vs. Additional Commissioner, (2025) 27 Centax 239 (Guj.)
2. Adhiraj Distributors Ltd. vs. Additional Commissioner of Revenue, (2025) 31 Centax 391 (Cal.)
3. Med Biogenex Pvt. Ltd. vs. Superintendent, Central Goods & Services Tax & Central Excise, (2025) 28 Centax 357 (Cal.)