Tvl. Power Lead Electricals v. Deputy State Tax Officer
In favour of the revenue
The ruling in brief
Tvl. Power Lead Electricals filed W.P. No. 31815 of 2025 before the Madras High Court; decision 8 June 2026. A demand arose from differences between GSTR-2A and GSTR-3B reflecting input tax credit. The assessee contended proceedings under Section 73 were time-barred because the department did not initiate action within the normal limitation. The revenue relied on Section 168A, which excluded certain periods during Covid-19 from limitation computation. The court held the exclusion applied and proceedings were not barred. The writ was dismissed; outcome in favour of revenue. Sections 16, 73, 74 and 168A frame limitation in mismatch cases. CAs should note extended timelines when advising on ITC reconciliation disputes. This summary is not legal advice. Assessees cannot assume Covid-era filing delays automatically extinguish mismatch-based demands without applying the statutory exclusion formula.
For information only — not legal advice. Read the full judgment and applicable law before relying on this summary.
Provisions considered
- CGST S.16 — Eligibility and conditions for taking input tax credit.
- CGST S.73 — Determination of tax not paid or short paid (non-fraud cases).
- CGST S.74 — Determination of tax not paid or short paid involving fraud or suppression.
- CGST S.168A — Power of Government to extend time limits in special circumstances.
Source documents
Similar rulings
In favour of the assessee; matter remanded
Cart Infralog Ltd. v. Additional Commissioner
Cart Infralog Ltd. challenged input tax credit recovery before the Calcutta High Court in WPA No. 16556 of 2025, decided 27 August 2026. The assessee demonstrated valid tax invoices, physical receipt of goods, and payment to suppliers for the transactions in dispute. Recovery was nevertheless pursued because suppliers failed to deposit GST and corresponding entries did not appear in GSTR-2A. Justice Smita Das De held that, absent collusion or fraud by the recipient, coercive recovery from the purchaser was without jurisdiction under sections 16, 73, 74, and 79 of the CGST Act; the department should first proceed against defaulting suppliers under section 79. The impugned recovery was quashed and the matter remanded for lawful action. Outcome favoured the assessee. This editorial summary is for chartered accountants and is not legal advice.
In favour of the assessee
Sumant Kumar Agarwal v. Commissioner of CGST & CX
Sumant Kumar Agarwal filed before the Calcutta High Court; order dated 10 September 2026. Revenue had reversed input tax credit citing delayed GST return filing. After retrospective insertion of Sections 16(5) and 16(6) from 1 July 2017, the assessee filed a rectification application and returns within the extended period contemplated by the amendment. There was no substantive dispute that filing met the relaxed timeline. Lower appellate authorities nevertheless rejected relief, ignoring both the retrospective extension and the pending rectification. The High Court termed that approach perverse and set aside the orders, directing appropriate relief in line with Section 16. Outcome: in favour of the assessee. Section 74 featured in the underlying demand context. This self-contained summary is not legal advice.
In favour of the assessee
Shiv Shakti Trading Co. v. State of Haryana
Shiv Shakti Trading Co. and allied petitioners filed consolidated writs before the Punjab & Haryana High Court, decided 22 July 2026. The revenue had initiated proceedings under Sections 73 and 74 of the CGST, PGST and HGST Acts to recover amounts said to represent input tax or credit wrongly availed under the erstwhile Haryana VAT Act before GST. The petitioners contended that pre-GST VAT credits and related disputes fall outside the GST determination and recovery provisions. The court agreed: Sections 73 and 74 address GST-era liabilities, not legacy VAT credits governed by transition rules including Section 140. Proceedings lacked jurisdiction and could not be sustained. Outcome across the batch of petitions: in favour of the assessees. This editorial summary is not legal advice.
In favour of the assessee
Zach Rubber (P.) Ltd. v. State Tax Officer
Zach Rubber (P.) Ltd. filed WP(C) No. 20131 of 2026 before the Kerala High Court; judgment 14 July 2026. The State Tax Officer denied input tax credit after the company filed its March 2020 return on 17 November 2020, treating the claim as barred under Section 16(4). The assessee relied on Section 16(5), which permits ITC where the return for the period is filed on or before 30 November 2021, and on Section 168A where relevant for timeline computation. The court held rejection as purely time-barred was unsustainable and directed reconsideration if the assessee was otherwise eligible. Outcome: in favour of the assessee. This aligns with other High Courts on post-amendment ITC relief. Not legal advice. Officers must apply Section 16(5) prospectively to March 2020 and similar periods when returns precede the November 2021 cutoff.
See the decision
Bhardwaj Construction v. Union of India
M/s. Bhardwaj Construction filed CWJC No. 4763 of 2026 before the Patna High Court, decided 6 July 2026, against a section 73 BGST order disallowing input tax credit as beyond section 16(4) time limits, with recovery enforced years later. The assessee invoked retrospective sections 16(5) and 16(6) via Finance (2) Act 2024 and Circular No. 237/31/2024-GST paragraph 3.5, permitting rectification where no appeal was filed against the demand order. The Court declined writ quashing but granted liberty to file section 148 rectification within one month, with hearing and reasoned order within three months. Writ disposed accordingly. Appropriate route for time-bar ITC disputes post-circular. Not legal advice. Readers should consult the full judgment and current notifications before advising clients on compliance steps.