Delhi HC Waives Pre-Deposit in GST ITC Dispute; Appeal Permitted
The Delhi High Court has recently agreed with the arguments of a petitioner stating that taxpayers can claim Input Tax Credit (ITC) for FY 2018-19 up to November 30, 2021. However, the court directed the petitioner to file an appeal as the challenged order was appealable.
The petitioner, Heal Health Connect Solutions Pvt Ltd, filed a writ petition before the Delhi High Court challenging a show cause notice dated 05.12.2023 and a GST demand order dated 20.02.2024. Additionally, the petitioner also challenged the validity of the Notification No. 09/2023- Central Tax. This notification is not pressed, and the decision will be subject to the outcome of the Supreme Court in S.L.P. (C) No. 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
In the SCN, the following grounds were raised:
(i) Reconciliation of GSTR-01 with GSTR-3B
(ii) The excess input tax credit (ITC) claimed on account of non-reconciliation of information declared in GSTR-3B
(iii) Excess ITC availed in GSTR-3B compared to the tax on inward
supplies declared by the suppliers
(iv) Invalid ITC under Section 16(4)
The GST department refused to allow the petitioner to claim ITC as they filed the return after the specified period. The petitioner argued that under section 16(5), the time period has been extended till November 30, 2021, and they claimed ITC for February 2019 and March 2019, which were within the time period.
The Bench, comprising Justice Prathiba M. Singh and Justice Shail Jain, observed that Section 16(5) extends the time period for filing GST returns up to November 30, 2021, and the financial year in the present case is FY 2018-19. However, since the order was appealable, the court directed the petitioner to file an appeal before the Appellate Authority before October 15, 2025, and the court also waived the mandatory pre-deposit, giving major relief to the petitioner. It further directed that the appeal must not be dismissed if it is filed before the given time period.
The court also ordered that the petitioner must be given access to the GST portal within one week to download any documents. The outcome will also depend on the decision of the Supreme Court in S.L.P. (C) No. 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.