Retrospective input tax credit amendment supports interim stay of GST demand order pending further hearing.

A challenge to an interim GST demand order under Section 73(9) turned on the effect of the newly inserted Section 16(5) of the CGST Act, introduced retrospectively from 1 July 2017, which extended entitlement to input tax credit up to 30 November 2021 for specified financial years. The Court noted the petitioner's reliance on return-filing dates and the respondents' concerns regarding the WBGST component, and on the materials before it found a prima facie case for hearing. The impugned order was stayed until the next hearing date, with the matter listed for January 2025.

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Issues: Whether the impugned order under Section 73(9) of the GST law should be stayed at the interim stage in view of the newly inserted provision granting entitlement to input tax credit up to 30 November 2021 for specified financial years.

Analysis: The challenge was founded on the insertion of sub-section (5) to Section 16 of the CGST Act, 2017 by notification dated 16 August 2024, with retrospective effect from 1 July 2017, and the consequent contention that the restriction under sub-section (4) stood diluted. The Court noted the petitioner's reliance on the dates of filing of returns and also noticed the respondents' request for instructions on the impact of the amendment on the WBGST component. Taking note of the newly inserted provision and the materials on record, the Court found a prima facie case for hearing.

Outcome: The impugned order was stayed till the next date of hearing and the matter was directed to be listed in January 2025.

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