Input tax credit denial under section 16(4) set aside for fresh consideration in light of section 16(5)

Denial of input tax credit under section 16(4) of the CGST/SGST enactments was required to be reconsidered in light of section 16(5). The authority was directed to re-examine the credit claim for the relevant financial years, take note of section 16(5), and pass fresh orders after giving the taxpayer an opportunity of hearing. The earlier rejection was set aside only to that extent, leaving the claim open for fresh consideration on the statutory basis now applicable.

---

---

Issues: Whether the denial of input tax credit under section 16(4) of the CGST/SGST enactments required reconsideration in the light of section 16(5), and whether the impugned orders should be set aside to that extent with a direction for fresh orders.

Analysis: The challenge related to denial of input tax credit for the relevant financial years on the basis of section 16(4). The petitioner relied on the later insertion of section 16(5) and sought reconsideration of the earlier denial. The competent authority was directed to re-examine the claim by taking note of section 16(5) and to afford the petitioner an opportunity of hearing before passing fresh orders.

Conclusion: The denial of input tax credit to the extent founded on section 16(4) was set aside for fresh consideration under section 16(5), with a direction to pass fresh orders after hearing the petitioner.

---