Introduction:

The Calcutta High Court recently addressed a case concerning the entitlement to Input Tax Credit (ITC) under Section 16 of the GST Act. The case involved a writ petition by BBA Infrastructure Limited, challenging the denial of ITC for the period from November 2018 to March 2019 due to the late filing of returns beyond the stipulated time under Section 16(4) of the GST Act.

Arguments of Both Sides:  

The petitioner argued that Section 16(4) couldn’t supersede or override the broader scheme of the statute, suggesting that Section 16(2) had an overriding effect on Section 16(4). On the contrary, the respondent contended that the non-obstante clause in Section 16(2) didn’t limit the operation of Sections 16(3) or 16(4) but complemented them, restricting the provisions collectively.

Court’s Observations and Judgement:  

The High Court ruled that Section 16(4) serves as one of the conditions for a registered person to claim ITC, emphasizing that it didn’t violate the Constitution. The court highlighted that fulfilling the conditions specified in the Act is imperative to acquire the vested right of claiming ITC under Section 16(1). It concluded that Section 16(2) restricts the credit available to dealers who meet the prescribed conditions, supporting the restrictive interpretation of Section 16(1) of the GST Act.