Input tax credit under amended GST law led the court to quash the assessment and remand for fresh consideration.

The Karnataka HC applied the amended GST provision inserting Section 16(5) and held that the assessee's claim to input tax credit had to be examined in light of the extended time limit for the specified financial years. The impugned assessment order denying ITC and the consequential ITC blocking were quashed, and the matter was remitted to the stage of show cause notice for fresh consideration after hearing the petitioner and proceeding under the amended law. The challenge to the statutory provisions and other rival contentions was left open.

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Issues: Whether the impugned assessment order denying input tax credit and the consequential ITC blocking deserved to be quashed and the matter relegated for reconsideration in the light of the amended provision inserting Section 16(5) into the GST law.

Analysis: The petition was disposed of following the earlier coordinate decision which applied the amendment brought in by Section 118 of the Finance (No.2) Act, 2024 inserting Section 16(5) into the CGST/KGST regime. That amendment extended the time for availing input tax credit for specified financial years, and the Court directed the authorities to give effect to the amended provision, hear the petitioner, and proceed in accordance with law. The challenge to the statutory provisions and other rival contentions were expressly left open.

Conclusion: The impugned assessment order was quashed and the matter was sent back to the stage of show cause notice for fresh action in accordance with the amended GST provisions, with the other challenges left undecided.

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