2024 (10) TMI 375 - HC - GST

Challenge to assessment order - Input Tax Credit has been disallowed only on the ground that the claims have been lodged beyond the period prescribed under Section 16(4) of the GST Acts - HELD THAT - The impugned order passed by the respondent dated 31.01.2024 is set aside. The learned assessing/adjudicating authority/respondent would re-do the assessment by taking into account the amendment referred supra. The petitioner may submit their objection by way of reply, within a period of three (3) weeks from the date of receipt of a copy of this order along with the amendment and other details. If any such reply is filed, the same shall be considered and orders shall be passed, after affording reasonable opportunity of personal hearing to the petitioner. In respect of other issues, the impugned order shall remain undisturbed. The respondent shall withdraw the garnishee proceedings, insofar as it relates to the demand in view of denial of ITC in terms of Section 16(4) of the Act for the period 2017-2018 covered vide order, dated 31.01.2024. Liberty is granted to the respondent to continue with the garnishee proceedings in respect of any other demand covered by the said garnishee proceedings. Petition disposed off.

Summary

Issues:
Challenging assessment order disallowing Input Tax Credit under GST Act Section 16(4); Impact of amendment inserting Section 16(5) through Finance Act; Garnishee proceedings initiated post assessment order.

Analysis:
The Writ Petition challenges an assessment order disallowing Input Tax Credit (ITC) under the GST Act Section 16(4) for the period 2017-2018. The petitioner argues that an amendment has been made to the GST Acts, inserting Section 16(5) through the Finance Act, allowing ITC for specific financial years until November 30, 2021. The petitioner contends that the assessment should be redone considering this amendment, and garnishee proceedings initiated subsequently should be withdrawn. The respondent agrees to reassess the matter in light of the new amendment and withdraw the garnishee proceedings.

The Court sets aside the impugned assessment order dated January 31, 2024, directing the assessing authority to redo the assessment considering the newly inserted Section 16(5) from the Finance Act. The petitioner is given three weeks to submit objections to the reassessment. Any objections submitted will be reviewed, and a decision will be made after providing a reasonable opportunity for a personal hearing. The impugned order remains undisturbed regarding other issues. The respondent is instructed to withdraw the garnishee proceedings related to the ITC denial under Section 16(4) for the period 2017-2018. However, the respondent is permitted to continue the garnishee proceedings for any other demands covered by the same proceedings.

In conclusion, the Writ Petition is disposed of without costs, and connected miscellaneous petitions are closed.