Authority: Calcutta High Court (Justice Smita Das De)

Order Date: 14 Oct 2026

Case Overview

  • Parties: Petitioner – M/s A2Z Infra Engineering Ltd.; Respondents – Union of India, State (unnamed), and other authorities (including respondent no. 9, the tax authority).
  • Nature of Proceeding: Writ petition (WPA 16747 of 2025) challenging the legality and sustainability of the adjudication order dated 27‑Aug‑2024, the rectification order dated 06‑Jan‑2025, and appellate orders dated 06‑Feb‑2025 and 07‑Apr‑2025, all issued under the CGST/IGST Act, 2017, for FY 2019‑20.
  • Key Allegations: The petitioner argued that the Finance (No. 2) Act 2024 inserted sub‑section 5 of section 16, retrospectively regularising Input Tax Credit (ITC) for FY 2017‑18 to 2020‑21 provided returns were filed by 30 Nov 2021. A2Z Infra filed GSTR‑3B returns for July 2018 to March 2020 before that cut‑off date and therefore should receive ITC. The respondent’s demand of Rs 3,60,04,668 dated 27‑Aug‑2024 was therefore illegal.
  • Additional Facts: During pendency, the Electronic Credit Ledger was blocked for the period 01‑Apr‑2026 to 05‑Oct‑2026, and an amount of Rs 1,92,03,770 was debited on 17‑Aug‑2026 without prior intimation or hearing.
  • Legal Precedent Cited: The petitioner relied on the Calcutta High Court’s decision in Hiranmoy Dutta vs. State of West Bengal (2025) 172 taxmann.com 750, which held that ITC disallowed due to late filing is regularised if returns are filed before 30 Nov 2021 under the inserted clause.

Final Outcome

  • The Court found a prima facie case and held that, by virtue of the inserted clause, the petitioner cannot be denied the benefit of the amendment; the amendment is curative and retrospective from 01‑Jul‑2017.
  • Orders dated 27‑Aug‑2024, 06‑Jan‑2025, 06‑Feb‑2025, and 07‑Apr‑2025 are quashed and set aside.
  • The demand of Rs 3,60,04,668 is to be readjudicated taking into account Section 16(5) and the blocking of the Electronic Credit Ledger.
  • Respondent authorities are restrained from taking any further coercive steps until the readjudication is completed.
  • Respondent no. 9 must complete the readjudication, provide a personal hearing, and pass a reasoned order on or before 30 Nov 2026.
  • No affidavit was called; therefore, the allegations in the writ petition are deemed not admitted by the respondents.
  • The Court directed that an urgent certified copy of the order be supplied to the parties.

Topics: GST Input Tax Credit, Tax Litigation