GST input tax credit amendment under new Section 16(5) led to quashing of the original adjudication and remand.

Insertion of Section 16(5) into the Central Goods and Services Tax Act, 2017 by Finance (No. 2) Act, 2024 was treated as curing the grievance arising under Section 16(4), once the amendment was brought into force on 27 September 2024. The adjudication was therefore required to be reconsidered under the amended regime, following the approach adopted in an identical matter. The impugned Order-in-Original was quashed and the matter remanded for fresh adjudication in light of Section 16(5).

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Issues: Whether the impugned Order-in-Original was liable to be quashed and the matter remanded in view of the insertion of Section 16(5) of the Central Goods and Services Tax Act, 2017 by Finance (No. 2) Act, 2024, and whether the challenge to Section 16(4) of the Central Goods and Services Tax Act, 2017 survived.

Analysis: The petitioner's grievance under Section 16(4) was stated to have been addressed by the statutory amendment introduced through Section 118 of Finance (No. 2) Act, 2024, which inserted Section 16(5) into the Central Goods and Services Tax Act, 2017. The amended provision was brought into force by notification dated 27 September 2024. In light of the amendment, the Court treated the controversy as one requiring reconsideration by the adjudicating authority on the basis of the newly inserted sub-section (5), following the course adopted in an identical matter.

Conclusion: The writ petition was allowed, the impugned Order-in-Original was quashed, and the matter was remanded for fresh adjudication in the light of Section 16(5) of the Central Goods and Services Tax Act, 2017.

Ratio Decidendi: Where a statutory amendment that directly addresses the grievance is brought into force, the original adjudication may be set aside and the matter remitted for reconsideration under the amended regime.

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