Madras High Court Allows Relief to GST Dealer for Delayed GSTR-3B Filing
The Madras High Court has granted relief to a GST-registered dealer, News Logistix, allowing their claim for input tax credit (ITC) which was previously denied due to delayed filing of GSTR-3B returns. The court considered the hardships faced by the dealer, including the impact of COVID-19, health issues, and accidental events.
GstItcMadras High CourtGstr3bNews LogistixReal EstateSep 12, 2025
The present case was instituted before the High Court by the petitioner, News Logistix, against the order of the Superintendent of GST and Central Excise, Karur-II Range, Karur Division, challenging the reversal of ITC ordered by the Superintendent on account of delayed filing of GSTR-3B.
When the matter came up before the Madras High Court, both News Logistix, represented by Divya A, and Sai Srujan Tayi and Pooja Jain appearing for the department drew attention to an earlier common order of this Court dated October 17, 2024, in W.P. No. 25081 of 2023 - Sri Ganapathi Pandi Industries vs. The Assistant Commissioner (Sri GanapathiPandi).
In Sri Ganapathi Pandi, it was held that registered dealers who were unable to file GSTR-3B returns due to COVID-19 lockdown, health ailments, or accidental events such as fires could not be penalised by way of reversal of ITC, especially in light of legislative amendments made thereafter. In that case, the Court noted that the department had issued Show Cause Notices (SCNs) proposing to reverse ITC without taking into account the genuine hardships faced by dealers and confirmed those orders.
The Court observed that although such dealers had filed GSTR-1 returns in time, they had genuine difficulties in filing GSTR-3B returns, leading to delay in availing ITC. The Bench of Justice Krishnan Ramasamy also noted the significance of the 53rd GST Council Meeting held on June 22, 2024, wherein the Council recommended the extension of the deadline for availing ITC under Section 16(4) of the CGST Act.
Acting on this recommendation, the Government amended Section 16 by inserting Section 16(5) through the Finance Act (No. 2) of 2024, with retrospective effect from July 1, 2017. This provision allowed taxpayers to avail ITC for financial years 2017-18 to 2020-21 if GSTR-3B returns were filed by November 30, 2021. Notification No.17/2024-Central Tax dated September 27, 2024, and Circular No.237/31/2024-GST further clarified the implementation of this provision.
The Court held that, in light of these developments, the impugned order reversing ITC on the grounds of limitation were unsustainable. It accordingly quashed the order to that extent and restrained the department from initiating further proceedings based on limitation. The Court also directed immediate de-freezing of the petitioner’s bank accounts if frozen pursuant to the impugned order and permitted refund or utilisation of amounts collected from the petitioner’s cash or credit ledgers. However, it made it clear that the department retained the liberty to proceed with action in cases involving allegations of wrong availment, excess claim, or fake ITC.
In effect, the Madras High Court allowed the writ petition and set aside the department’s order to the extent of the bar on availing ITC on the basis of limitation.
Frequently Asked Questions
What is the GSTR-3B in the context of GST?
GSTR-3B is a monthly self-declaration form that GST-registered dealers need to file to report their sales, purchases, and tax liabilities. It is a summary of the transactions made during the month and is used to calculate the tax liability for the period.
What is Input Tax Credit (ITC) in GST?
Input Tax Credit (ITC) is a mechanism under the GST regime where a registered dealer can claim a credit for the GST paid on their purchases, which can be used to offset the GST they owe on their sales. This helps in reducing the tax burden.
Why was News Logistix allowed relief by the Madras High Court?
News Logistix was allowed relief by the Madras High Court because they faced genuine hardships such as the impact of COVID-19, health issues, and accidental events, which led to delays in filing their GSTR-3B returns. The court considered these factors and the legislative amendments that allowed for extended deadlines for filing GSTR-3B.
What is the significance of the 53rd GST Council Meeting mentioned in the article?
The 53rd GST Council Meeting held on June 22, 2024, recommended extending the deadline for availing ITC under Section 16(4) of the CGST Act. This recommendation was later implemented through the Finance Act (No. 2) of 2024, allowing taxpayers to avail ITC for financial years 2017-18 to 2020-21 if GSTR-3B returns were filed by November 30, 2021.
What were the outcomes of the Madras High Court's decision in this case?
The Madras High Court quashed the order reversing ITC on the grounds of limitation and restrained the department from initiating further proceedings based on limitation. The court also directed the immediate de-freezing of the petitioner’s bank accounts and permitted refund or utilisation of amounts collected from the petitioner’s cash or credit ledgers.
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