Input Tax Credit belated availment and GSTR-2A/3B mismatch remitted for fresh adjudication; 50% pre-deposit required, attachment lifted

Belated availment of input tax credit is governed by a retrospective statutory amendment inserting provisions effective from 01.07.2017, requiring re-adjudication and permitting late ITC claim; the question of mismatch between GSTR-2A and GSTR-3B is remitted for fresh consideration after hearing, with impugned orders quashed. The petitioner must deposit 50% of the disputed tax in cash from its electronic cash register within 30 days; bank attachment will be lifted upon such deposit and absence of other arrears, and failure to comply permits recovery as if the petition were dismissed.

---

---

Issues: (i) Whether the demand confirmed on account of belated availing of Input Tax Credit under Section 16(4) requires re-adjudication in view of statutory amendments (Sections 16(5) and 16(6)) inserted by Finance (No.2) Act, 2024; (ii) Whether the demand confirmed on account of mismatch between GSTR-2A and GSTR-3B requires reconsideration and on what terms the matter should be remitted.

Issue (i): Whether liability confirmed for belated availing of Input Tax Credit under Section 16(4) should be re-adjudicated in view of the retrospective insertion of Sections 16(5) and 16(6) by Finance (No.2) Act, 2024.

Analysis: The Court notes the statutory intervention by Finance (No.2) Act, 2024 which inserted Sections 16(5) and 16(6) into the GST enactments with retrospective effect from 01.07.2017 (SO 4253(E) dated 16.08.2024). The insertion affects the legal framework governing belated availing of Input Tax Credit and therefore the earlier adjudication on that ground requires fresh consideration under the amended provisions.

Conclusion: In favour of Assessee the part of the demand attributable to belated availing of Input Tax Credit is to be re-adjudicated in accordance with the inserted Sections 16(5) and 16(6).

Issue (ii): Whether the demand confirmed on account of mismatch between details in GSTR-2A and GSTR-3B should be remitted for fresh consideration and on what conditional terms.

Analysis: The Court finds that the mismatch-related demand requires adjudication after giving the petitioner an opportunity to be heard and to file supporting documents. The Court conditions remand on the petitioner making an interim compliance by way of pre-deposit of 50% of the disputed tax confirmed on account of the mismatch, filing a reply and documents treating the impugned order as an addendum to the show cause notice, and permits the authority to pass a final order thereafter.

Conclusion: Against Assessee on this issue but subject to conditional relief the mismatch-related demand is remitted to the original authority for fresh consideration after hearing; the petitioner must deposit 50% of the disputed tax (pertaining to the mismatch) from electronic cash within 30 days as a pre-condition and file a reply and documents; on compliance the bank attachment shall be vacated.

Final Conclusion: The impugned orders are quashed and the matter is remitted for re-adjudication and fresh consideration: the portion relating to belated Input Tax Credit shall be reconsidered under the newly inserted Sections 16(5) and 16(6), and the portion relating to mismatch shall be reconsidered after the petitioner complies with the conditional pre-deposit and filing requirements; the authority is directed to decide the matter on merits expeditiously.

Ratio Decidendi: Where a statutory amendment (retrospective insertion of Sections 16(5) and 16(6)) alters the legal regime governing entitlement to Input Tax Credit, earlier adjudications on belated availing must be reopened and re-adjudicated under the amended provisions; demands founded on mismatches between return statements may be remitted for fresh consideration but may be subject to a pre-deposit condition and opportunity to be heard.

---