Facts of the Case

DYS Impex Private Limited's appeal against a partial refund rejection order in Form GST RFT-06 dated 14.04.2023 (for the tax period July-September 2019) was dismissed by an appellate order dated 21.02.2024. Both the proper officer and the appellate authority had disallowed part of the refund by relying on the proviso to Section 16(4) of the CGST/WBGST Act, treating the input tax credit as pertaining to inward supplies of financial year 2017-18 though claimed in September 2019. The petitioner contended that the subsequent retrospective insertion of Section 16(5) — extending the time limit for availing ITC for FY 2017-18 to 2020-21 through returns filed up to 30.11.2021 — had not been considered.

Issues Involved

  1. Whether orders restricting a refund/ITC claim by relying solely on the proviso to Section 16(4) CGST Act remain sustainable in light of the retrospective insertion of Section 16(5).

Petitioner's Arguments

  • Since Section 16(5) had been inserted with retrospective effect from 01.07.2017, extending the time for filing returns for FY 2017-18 to 2020-21 up to 30.11.2021, the petitioner was entitled to the ITC benefit and the refund ought not to have been restricted.

Respondent's Arguments

  • Both the proper officer's and the appellate authority's orders had proceeded solely on the proviso to Section 16(4), without regard to the subsequently inserted Section 16(5).

Court Order / Findings

  • Held that the scope of Section 16(4) stands significantly altered by the retrospective insertion of Section 16(5), which extends the time for filing returns under Section 39 for FY 2017-18 to 2020-21 up to 30 November 2021.
  • Held that the orders of both the proper officer and the appellate authority, having proceeded without regard to Section 16(5), could not be sustained.
  • Set aside both orders and remanded the matter to the proper officer for re-adjudication having regard to Section 16(5), directing that the proceedings be concluded within 12 weeks.

Important Clarification

  • Refund or ITC claims for FY 2017-18 to FY 2020-21 that were previously restricted or denied solely by reliance on the proviso to Section 16(4) CGST Act must be re-examined in light of the retrospectively inserted Section 16(5), which extends the time limit for availing ITC through returns filed under Section 39 up to 30 November 2021 for those years — orders that ignore Section 16(5) are liable to be set aside and remanded.

Sections Involved

  • Section 16(4), CGST/WBGST Act, 2017 (proviso) — time limit for availing input tax credit.
  • Section 16(5), CGST/WBGST Act, 2017 (inserted retrospectively w.e.f. 01.07.2017) — extended time limit for FY 2017-18 to 2020-21.
  • Form GST RFT-06 — refund sanction/rejection order.

Decision – In Favour of

In favour of the Assessee.

Case Details

High Court at Calcutta, Constitutional Writ Jurisdiction (Appellate Side); WPA 2980 of 2025; Coram: Justice Raja Basu Chowdhury; Order dated 25.06.2025.

Link to Download the Order

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