Transitional input tax credit claim under GST required proper stock verification; demand was set aside and remanded for fresh adjudication.

Transitional input tax credit under the GST regime for stock held on 30.06.2017 required proper verification of the assessee's replies, supporting documents and return data before confirmation of demand. The High Court found that the adjudicating authority had not undertaken that necessary examination, so the demand confirmation could not stand as a final merits determination. The matter was remitted for de novo adjudication, with directions for the assessee to deposit 25% of the disputed tax, file a reply with documents, and be afforded a personal hearing. Interim attachment relief was linked to compliance with those directions.

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Issues: Whether the impugned adjudication order confirming the GST demand and denying transitional input tax credit required interference and remand for fresh consideration.

Analysis: The dispute concerned transitional input tax credit claimed in respect of stock available on 30.06.2017 under Section 140 of the GST regime. The Court noted that the assessee had asserted prior replies and the availability of stock, but the adjudicating authority had not undertaken the necessary verification, including comparison with the relevant return data and supporting material. In the absence of such exercise, the demand confirmation could not be sustained as a final adjudication on merits. The Court therefore directed de novo consideration, with the assessee to deposit 25% of the disputed tax, file a reply with documents, and be granted a personal hearing.

Conclusion: The matter was remitted for fresh adjudication on merits, subject to compliance with the directed pre-deposit and filing of reply and documents.

Final Conclusion: The writ petition resulted in a conditional remand for reconsideration of the GST demand and transitional credit claim, with consequential interim attachment relief linked to compliance.

Ratio Decidendi: Where a GST demand involving transitional credit is confirmed without proper verification of stock, replies, and supporting return data, the adjudication is liable to be set aside and remitted for fresh decision after due hearing.

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