Input tax credit denial set aside for fresh consideration after section 16(5) was taken into account and hearing granted.

Input tax credit denied under section 16(4) of the GST enactments was set aside to the extent it rested on that disallowance, because the petitioner relied on section 16(5) as a later provision potentially supporting entitlement. The competent authority was directed to reconsider the claim afresh after taking section 16(5) into account and after granting a hearing. The disallowance could not stand in its present form, and the claim remained open for fresh adjudication.

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Issues: Whether the denial of input tax credit under section 16(4) of the GST enactments required interference and whether the matter had to be reconsidered in light of section 16(5).

Analysis: The petitioner's claim to input tax credit was denied under section 16(4) for the financial year 2019-20. In view of the later provision invoked by the petitioner, the Court found it appropriate to set aside the order only to the extent of the disallowance founded on section 16(4) and to direct the competent authority to reconsider the claim after taking note of section 16(5) and after granting a hearing.

Conclusion: The disallowance of input tax credit could not stand in its present form and the matter was remitted for fresh adjudication after considering section 16(5).

Final Conclusion: The petitioner obtained partial relief, with the adverse portion of the order set aside and the claim left open for fresh decision by the competent authority.

Ratio Decidendi: Where a statutory provision affecting input tax credit is later relied upon as potentially conferring entitlement, the disallowance may be set aside and the claim remitted for fresh consideration after hearing the affected party.

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