Input tax credit denial under section 16(4) must be reconsidered in light of section 16(5) and fresh hearing.

Denial of input tax credit under section 16(4) of the CGST/SGST regime required reconsideration in light of section 16(5). The Court accepted that the petitioner's claim could not be finally decided without fresh examination by the competent authority and directed a rehearing after considering section 16(5) and giving the assessee an opportunity of hearing. The disallowance under section 16(4) was set aside to that extent, and the matter was remitted for fresh orders in favour of the assessee.

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Issues: Whether the denial of input tax credit under section 16(4) of the CGST/SGST regime required interference in view of section 16(5), and whether the matter should be reconsidered by the competent authority.

Analysis: The petitioner's claim was that the later notification of section 16(5) entitled it to input tax credit that had been denied under section 16(4). The Court accepted that this contention required fresh examination by the competent authority, and directed reconsideration after taking note of section 16(5) and after affording the petitioner an opportunity of hearing.

Conclusion: The denial of input tax credit under section 16(4) was set aside to that extent, and the matter was remitted for fresh orders in the light of section 16(5), in favour of the assessee.

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