Supreme Court issued notice for denial of Input Tax Credit (ITC) due to belated filing of GST Returns
Supreme Court in the case of MRITYUNJAY KUMAR v. THE UNION OF INDIA AND ORS. [SLP(C) No. 28270/2023] has issued notice for denial of ITC due to the belated filing of ITC.
The notice was issued in response to a Special Leave Petition (SLP) filed by an assessee challenging a Patna High Court judgment that upheld the constitutional validity of section 16(4) of the CGST/Bihar GST Act, 2017.
It may be noted that the section 16(4) denies Input Tax Credit (ITC) for any invoice or debit note issued after the due date of furnishing returns under section 39, specifically for the month of November following the end of the financial year or the relevant annual return, whichever is earlier.
The petitioner argues before the SC that section 16(4) is confiscatory in nature, as the denial of ITC acts as a forfeiture of property in the form of a financial benefit when returns are filed late. The petitioner points out that the Revenue is collecting late fees for belated returns, which can be regularized, but ITC is permanently lost in the process.
The outcome of the case is pending as the copy of the order is awaited from the Supreme Court.
Hope something positive happens for the benefit of the genuine taxpayers who have filed the GST returns belatedly.