Retrospective GST relief on delayed Input Tax Credit prompted remand of the ITC-related demand for fresh consideration.

The demand component linked to delayed availment of Input Tax Credit under the GST regime was found to require reconsideration because the GST Council had examined the issue and the Finance (No. 2) Bill, 2024 proposed a retrospective relaxation for specified financial years. The court noted that the bill also stated that tax already paid or credit already reversed would not be refunded merely because of the proposed amendment. Accordingly, the ITC-related portion was set aside for fresh decision by the assessing authority, while the remaining demand was left open for statutory appeal and not examined on merits in the writ proceedings.

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Issues: Whether the demand attributable to delayed availment of Input Tax Credit required reconsideration in view of the proposed amendment, warranting partial setting aside of the impugned order and remand for fresh decision.

Analysis: The demand included a component relating to alleged delay in availing Input Tax Credit under Section 16(4) of the GST regime. The judgment noted that the GST Council had considered the issue and that Clause 114 of the Finance (No.2) Bill, 2024 proposed a retrospective relaxation for specified financial years, with Clause 146 providing that tax already paid or credit already reversed should not be refunded merely because of the proposed amendment. On that basis, the Court found that the ITC-related component required detailed reconsideration by the assessing authority. The remaining balance demand was not adjudicated on merits in the writ proceedings and was left open for statutory appeal.

Conclusion: The impugned order was set aside only to the extent of the Input Tax Credit component and the matter was remitted for fresh consideration; the assessee obtained partial relief.

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