In a landmark ruling, the Calcutta High Court in Manash Ghosh v. Assistant Commissioner of Revenue quashed a ₹1.18 crore Input Tax Credit (ITC) demand for FY 2018-19. The Court definitively ruled that the Revenue Department cannot invoke Section 16(4) of the CGST Act to deny legacy ITC solely due to the late filing of GSTR-3B returns, provided the statutory conditions of the newly inserted curative provision are met.
Key Rulings & Statutory Interpretations:
Retrospective Applicability:The Court clarified that Section 16(5) is a curative amendment enacted to remedy unintended hardships. Consequently, it operates retrospectively from July 1, 2017, overriding the restrictive timelines previously imposed under Section 16(4).
Reopening Concluded Assessments: The High Court rejected the Revenue’s defense that Section 16(5) cannot reopen concluded assessments. The judgment establishes that past assessments are not immune to curative legislative amendments designed to regularize tax credits.
Regularisation Criteria:For financial years 2017-18, 2018-19, 2019-20, and 2020-21, the ITC stands fully regularized if the corresponding GSTR-3B return was filed on or before November 30, 2021.