The Andhra Pradesh High Court has clarified that the extended deadline under Section 16(5) of the GST Act applies to input tax credit claims for the financial year 2019-20, invalidating assessments based solely on the original filing deadline. This ruling reinforces statutory timelines over administrative rigidity and provides critical relief to taxpayers who filed claims within the extended window.
Background & Facts
The Dispute
The petitioner, Kameswari Agencies, a registered person under the Goods and Services Tax Act, 2017, claimed input tax credit (ITC) for the tax period spanning September 2019 to March 2020. The claims were filed in October 2020. The first respondent, the Assistant Commissioner, Dwarakanagar Circle, rejected these claims on the ground that the deadline under Section 16(4) of the GST Act - 25.10.2020 - had expired. Consequently, an order under Section 73 in Form GST DRC-07 dated 30.08.2024 was issued, denying ITC and demanding tax, interest, and penalty.
Key Facts
- The petitioner filed ITC claims for the following tax periods and dates:
- September 2019: 26.10.2020
- October 2019: 26.10.2020
- November 2019: 26.10.2020
- December 2019: 26.10.2020
- January 2020: 26.10.2020
- February 2020: 26.10.2020
- March 2020: 27.10.2020
- The financial year 2019-2020 falls within the scope of Section 16(5) of the GST Act, which provides an extended deadline for ITC claims.
- The petitioner had not filed any rectification application under Section 16(5) after the original deadline, but relied on the extended deadline as the governing provision.
- The order denying ITC was issued on 29.08.2024 and 30.08.2024, over four years after the claims were filed.
- Notices under Form GST DRC-13 dated 02.05.2025 and 11.12.2025 were served on the petitioner’s bankers on 02.03.2026.
- A notice of attachment of immovable property (Form GST DRC-16) was issued on 04.02.2026 under Revenue Case No. 19/2026/ETA-3.
Procedural History
- 26.10.2020 to 27.10.2020: Petitioner filed ITC claims for FY 2019-20 in GSTR-3B returns.
- 29.08.2024: Order denying ITC issued by Assistant Commissioner.
- 30.08.2024: Summary of Order in Form GST DRC-07 issued.
- 02.05.2025: Notice under Section 79(1)(c) of APGST Act issued to ICICI Bank.
- 11.12.2025: Notice under Section 79(1)(c) issued to State Bank of India.
- 02.03.2026: Notices served on bankers.
- 04.02.2026: Notice of attachment of immovable property issued.
- 20.04.2026: Writ Petition No. 7160/2026 filed before the Andhra Pradesh High Court.
- 29.04.2026: Judgment delivered.
The Parties' Positions
For the Petitioner
The petitioner contended that Section 16(5) of the GST Act, which came into effect on 01.07.2017, explicitly extended the time limit for claiming ITC for the financial years 2017-18, 2018-19, 2019-20, and 2020-21 to 30.11.2021. Since the claims were filed on 26.10.2020 and 27.10.2020 - well within this extended deadline - the rejection was legally unsustainable. The petitioner further argued that the denial violated Articles 14, 19(1)(g), 21, and 265 of the Constitution.
For the Respondent
The revenue authorities relied on Section 16(4), which mandates that ITC claims must be filed by the due date of the return for the month of September following the financial year - in this case, 25.10.2020. They argued that Section 16(5) was not applicable because the petitioner had not filed a rectification application under that provision and that the claims were filed after the original deadline.
Relief Sought
The petitioner sought:
- Setting aside of the order dated 29.08.2024 and Form GST DRC-07 dated 30.08.2024 denying ITC.
- Setting aside of notices under Form GST DRC-13 dated 02.05.2025 and 11.12.2025.
- Setting aside of the attachment notice (Form GST DRC-16) dated 04.02.2026.
- Stay of all recovery proceedings pending disposal of the writ petition.
The Legal Issue
The central question was whether Section 16(5) of the GST Act, 2017 grants a statutory extension of the deadline for claiming input tax credit for the financial year 2019-20 up to 30.11.2021, and whether claims filed within that period - such as those filed by the petitioner on 26.10.2020 and 27.10.2020 - can be rejected solely on the ground that they were filed after the original deadline under Section 16(4).
Arguments Presented
For the Petitioner
The petitioner’s counsel, S. Srinivasa Rao, relied on the plain language of Section 16(5), which states: "Notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note... pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed up to the thirtieth day of November, 2021." He argued that the phrase "notwithstanding anything contained in sub-section (4)" creates a clear override of the original deadline. The petitioner’s claims were filed on 26.10.2020 and 27.10.2020, which are well within the extended period. He further cited State of Karnataka v. M/s. MRF Limited and Commissioner v. M/s. Sree Sankara Enterprises to support the principle that statutory extensions must be given full effect.
For the Respondent
The Government Pleader for Commercial Tax contended that Section 16(5) was intended only for rectification of returns or belated filings where the taxpayer had failed to claim ITC in the original return. He argued that the petitioner had filed the claims in the original GSTR-3B returns and thus could not invoke the extended deadline. He further asserted that the petitioner had not sought rectification under Section 37 or any other provision and that the rejection was valid under the strict interpretation of Section 16(4).
The Court's Analysis
The Court examined the text of Section 16(5) and found no ambiguity. The provision explicitly states that it operates "notwithstanding anything contained in sub-section (4)" and applies to invoices pertaining to the financial year 2019-20. The Court held that the legislature’s intent was clear: to provide a uniform, extended window for taxpayers to claim ITC for the first four years of GST implementation, recognizing the transitional complexities faced by businesses.
"Section 16(5) is not a remedial provision limited to rectification applications; it is a substantive extension of time for claiming ITC, applicable to any return filed under Section 39 up to 30.11.2021."
The Court rejected the revenue’s argument that Section 16(5) only applies to rectified returns, noting that the provision does not contain any such limitation. The petitioner’s claims were filed in the original GSTR-3B returns within the extended deadline. The Court emphasized that the statutory language must be interpreted as written, and that administrative convenience cannot override clear legislative intent.
The Court further held that the notices under Form GST DRC-13 and the attachment notice under Form GST DRC-16 were premature and contingent upon the validity of the underlying order. Since the order denying ITC was set aside, these ancillary actions could not stand.
The Verdict
The writ petition is allowed. The orders dated 29.08.2024 and 30.08.2024 denying input tax credit for the period September 2019 to March 2020 are set aside. The matter is remanded to the first respondent to reconsider the ITC claims in accordance with Section 16(5) of the GST Act, 2017, and to allow the credit if the conditions of eligibility are otherwise satisfied. The notices under Form GST DRC-13 dated 02.05.2025 and 11.12.2025, and the attachment notice under Form GST DRC-16 dated 04.02.2026, are quashed. All pending recovery proceedings are stayed. There shall be no order as to costs.
What This Means For Similar Cases
Extended Deadlines Are Substantive, Not Remedial
- Practitioners must now argue that Section 16(5) is a standalone entitlement, not a rectification mechanism.
- ITC claims filed in original returns within the extended period (up to 30.11.2021) cannot be denied on the basis of Section 16(4) deadlines.
- Revenue authorities must review all pending ITC rejections for FY 2017-18 to 2020-21 where claims were filed before 30.11.2021.
Recovery Actions Must Halt Upon Legal Challenge
- Notices under Section 79(1)(c) (bank notices) and Form GST DRC-16 (attachment of property) are ancillary to the main order.
- If the main order is set aside, such notices are automatically invalid unless independently justified.
- Practitioners should immediately move for stay of recovery proceedings upon filing writ petitions challenging ITC denials.
Statutory Language Trumps Administrative Interpretation
- Courts will not read limitations into statutory provisions that are not present in the text.
- The phrase "notwithstanding anything contained in sub-section (4)" is a clear legislative override.
- Taxpayers should cite this judgment to challenge any denial of ITC for FY 2019-20 based on the 25.10.2020 deadline.
