Retrospective GST input tax credit amendments led the Madras High Court to quash the assessment and order fresh reconsideration.

Retrospective insertion of Sections 16(5) and 16(6) under the GST regime warranted reconsideration of an assessment order that had partly confirmed demand on matters potentially affected by those amendments. The remaining demand related to ineligible input tax credit under Section 17(5), while the petitioner's entitlement to credit despite belated availment also required examination. In these circumstances, the Madras High Court quashed the assessment order and remitted the matter to the assessing authority for fresh examination and a decision on merits.

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Issues: Whether the assessment order required interference in view of the retrospective insertion of Sections 16(5) and 16(6) into the GST regime and whether the matter should be remitted for fresh consideration of the petitioner's entitlement to input tax credit.

Analysis: The assessment order was noticed to have confirmed demand partly on account of matters that could be affected by the statutory insertion of Sections 16(5) and 16(6) with retrospective effect from 01.07.2017. The remaining demand was stated to relate to ineligible input tax credit under Section 17(5). In these circumstances, the matter was considered to require reconsideration by the assessing authority, particularly on the question whether the petitioner was otherwise entitled to input tax credit but for belated availment.

Conclusion: The assessment order was quashed and the matter was remitted to the second respondent for fresh examination and a decision on merits.

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