2026 (3) TMI 1620 - HC - GST

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 ... Challenged the orders passed under the Central Goods and Services Tax regime - Failure to consider material factual claim - reversal and reclassification of the input tax credit before the show cause notice. Material factual claim - fresh adjudication - HELD THAT: - The Court noted that this ground had been raised before the appellate authority but was rejected as unsubstantiated for want of documentary support. Since, before the Court, the respondent candidly confirmed the correctness of the petitioner's submission earlier recorded by the Court, the basis on which the impugned orders had proceeded required reconsideration. On that limited ground, and without examining the merits of the underlying input tax credit dispute, the Court held that the matter had to be reconsidered by the adjudicatory authority. [Paras 6, 7, 8, 9, 10] The impugned original and appellate orders were quashed, and the matter was remanded to the adjudicatory authority for fresh decision expeditiously; no finding on merits was returned. Final Conclusion: The writ petition was allowed in part by setting aside the original and appellate orders and remanding the matter for fresh adjudication in light of the respondent's confirmation of the petitioner's factual claim. The Court expressly left all merits open. 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.