Section 16(6) ITC Benefit on Revocation of GST Registration Not Retrospective | HC

Case Details: Saleena Shahul Hameed vs. State Tax Officer [2026] 183 taxmann.com 623 (Kerala)

Judiciary and Counsel Details

• Ziyad Rahman A.A., J.
• Padmanathan K.V. & R. Sreejith, Advs. for the Petitioner.
• P.R. Sreejith, Adv., Smt. Reshmitha R. Chandran, Sr. GP & P.R. Sreejith, Sr. SC for the Respondent.

Facts of the Case

The petitioner, a registered taxpayer engaged in distribution of SIM cards and recharge coupons, had closed down his business and voluntarily cancelled his GST registration with effect from 30.11.2018. At the time of cancellation, there was no outstanding tax liability. Subsequently, an intimation under Section 73(5) dated 24.12.2022 was issued alleging short payment of tax on the ground that tax declared in GSTR-3B was lower than that declared in GSTR-1, culminating in an order dated 30.04.2024 confirming demand. The said order was not challenged in appeal and attained finality. Thereafter, with effect from 01.10.2024, Section 16(6) was introduced enabling a taxpayer to claim input tax credit where cancellation of registration was subsequently revoked. The petitioner approached the High Court seeking restoration of registration solely for the purpose of availing benefit under the newly inserted Section 16(6).

High Court Held

The High Court held that the petitioner had consciously closed down the business and sought cancellation of registration, and had not challenged the demand order, which had attained finality. Section 16(6) applies only in cases where cancellation of registration is revoked in accordance with statutory remedies and does not create a fresh cause of action to seek restoration merely to avail its benefit. As on the date of the order confirming demand, Section 16(6) was not in force, and the provision was not retrospective in operation. The benefit introduced subsequently could not be claimed in respect of concluded proceedings. Accordingly, the writ petition seeking restoration of registration for availing benefit under Section 16(6) was dismissed in favour of the Revenue.