GST input tax credit relief under amended section 16(5) required fresh consideration after statutory retrospectivity.

Section 16(5) of the GST law, inserted by section 118 of the Finance (No. 2) Act, 2024 and given effect from 1 July 2017, extends entitlement to input tax credit for invoices and debit notes relating to the specified financial years up to 30 November 2021. In light of that statutory change, an assessment order and the related blocking of the input tax credit ledger could not be sustained as they stood. The appropriate course was to set aside the impugned action and remit the matter to the stage of the show cause notice so the amended provision could be applied after hearing the assessee and proceeding in accordance with law.

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Issues: Whether the insertion of section 16(5) into the GST law required quashing of the impugned assessment order and blocking of input tax credit, and whether the matter had to be sent back for fresh consideration under the amended regime.

Analysis: The amendment introduced by section 118 of the Finance (No.2) Act, 2024 inserted section 16(5) into the GST law with effect from 1 July 2017 and extended entitlement to avail input tax credit for invoices and debit notes relating to the specified financial years up to 30 November 2021. In view of that statutory change, the impugned order and the related blocking of the input tax credit ledger could not be sustained as they stood. The proper course was to set aside the impugned action and remit the parties to the stage of the show cause notice so that the amended provision could be given effect after hearing the assessee and proceeding in accordance with law.

Conclusion: The challenge to the impugned order and the ITC blocking succeeded, and the matter was remitted for fresh action under the amended provision.

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