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Madras High Court Ruling on Belated Input Tax Credit Claims: A Comprehensive Analysis u/s 16 (4)


The recent judgment of the Madras High Court in the case of Tvl. Kavin HP Gas Gramin Vitrak vs Commissioner of Commercial Taxes addresses crucial issues surrounding the belated claims of Input Tax Credit (ITC) and the absence of Form GSTR-2 notification. The petitioner, engaged in the business of Petroleum Gases, faced challenges in the scrutiny of GSTR-3B returns for the financial years 2017-2018 and 2018-2019. This article provides an in-depth analysis of the case, focusing on the technical impediments faced by the petitioner and the court's stance on rectifying procedural shortcomings.

Key Issues Raised by the Petitioner

1. Unavailability of Form GSTR-2: The petitioner argued that the unavailability of Form GSTR-2, as per Rule 60 of the TNGST Rules, hindered the proper claiming of ITC. The petitioner faced a financial crisis, leading to the physical submission of GSTR-3B, prompting authorities to question the belated ITC claims.


2. GSTR-3B Filing and ITC Claims: The petitioner contended that GSTR-3B filing is not intended for claiming ITC, and the reversal of input tax under Section 16(4) of the TNGST Act is inapplicable. Despite sales transactions being duly reported by suppliers through GSTR-1, the petitioner couldn't claim ITC due to the non-notification of Form GSTR-2.


3. Impugned Order Critique: The petitioner criticized the impugned order for not addressing specific contentions and passing a non-speaking order, creating a lack of clarity on the reasoning behind confirming alleged belated ITC claims.


Respondents' Stand and Counterarguments:

The respondents argued that the writ petitions are not maintainable, emphasizing the availability of an alternative remedy through an appeal to the Appellate Deputy Commissioner (GST Appeals). The burden of proof was placed on the petitioner, who failed to file objections and attend a personal hearing, resulting in the confirmation of proposed tax and penalty.

Court's Conclusion:

The court acknowledged the technical impediment faced by the petitioner due to the unavailability of Form GSTR-2. Relying on precedents recognizing the absence of enabling mechanisms, the court quashed the impugned orders. It directed authorities to allow manual returns for claiming ITC, emphasizing the practical difficulties faced by the petitioner. The judgment aligned with previous decisions, emphasizing the need for an enabling mechanism and highlighting the authorities' responsibility to rectify procedural shortcomings.


Analysis and Implications:

The case underscores the importance of addressing technical glitches in the GST system to ensure a fair and accessible framework for taxpayers. The court's decision emphasizes the need for an enabling mechanism, urging authorities to rectify procedural shortcomings promptly. This ruling aligns with previous decisions recognizing the challenges faced by taxpayers in the absence of necessary forms and procedures.


The Madras High Court's judgment in the case of Tvl. Kavin HP Gas Gramin Vitrak vs Commissioner of Commercial Taxes serves as a significant precedent in addressing challenges related to belated ITC claims and the non-notification of Form GSTR-2. The court's decision emphasizes the importance of a fair and accessible GST framework, urging authorities to take corrective measures promptly.

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