Reversal and reclassification of input tax credit before notice led to quashing of GST orders and remand for fresh adjudication.

Under the CGST regime, where it was admitted that the input tax credit had been reversed and reclassified under the proper head before the show cause notice, the factual basis of the adjudication required reconsideration. The Delhi HC therefore set aside the impugned adjudication and appellate orders and remanded the matter for fresh adjudication. The Court expressly made no finding on the merits of the claim, leaving the tax issue open for reconsideration by the authority.

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Issues: Whether the impugned adjudication and appellate orders were liable to be quashed and the matter remanded in view of the admitted factual position regarding reversal and reclassification of the input tax credit before the show cause notice.

Analysis: The petitioner invoked writ jurisdiction under Article 226 to challenge the orders passed under the Central Goods and Services Tax regime. The respondent's counsel confirmed the correctness of the petitioner's factual assertion that the relevant credit had been reversed and claimed under the proper head before issuance of the show cause notice. In light of that confirmation, the basis on which the authorities had proceeded required reconsideration. The Court therefore set aside the impugned orders and directed a fresh adjudication, expressly clarifying that no finding was returned on the merits of the claim.

Conclusion: The impugned orders were quashed and the matter was remanded to the adjudicating authority for fresh consideration.

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