Input tax credit denial required fresh reconsideration when a later statutory provision was claimed to govern entitlement.

Input tax credit denied under Section 16(4) was set aside where the petitioner asserted entitlement arising from Section 16(5). The Court held that the matter required fresh consideration by the competent authority, with the later provision taken into account and the petitioner given a hearing. The denial was interfered with only to the extent it rested on Section 16(4), and the issue of input tax credit was remitted for a fresh decision under the applicable statutory framework.

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Issues: Whether the order denying input tax credit under Section 16(4) required interference in view of Section 16(5) and whether the matter should be reconsidered afresh.

Analysis: The petitioner's claim to input tax credit was stated to arise from the operation of Section 16(5). The impugned order had denied the benefit by applying Section 16(4). In these circumstances, the matter warranted fresh consideration by the competent authority after taking note of the later provision and after affording the petitioner an opportunity of hearing.

Conclusion: The denial of input tax credit was set aside to the extent it rested on Section 16(4), and the competent authority was directed to pass fresh orders after considering Section 16(5) and hearing the petitioner.

Final Conclusion: The writ petition was allowed in part, and the issue of input tax credit was remitted for fresh decision.

Ratio Decidendi: Where a later statutory provision is asserted to affect entitlement to input tax credit, an order denying such benefit on the basis of an earlier provision may be set aside for fresh consideration with due hearing.

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