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Belated ITC hit by Section 16(4) was retrospectively cured by Sections 16(5) & 16(6); Madras HC remitted the GST demand for fresh consideration without pre-deposit.

Issue :
Whether the earlier order dated 24.03.2026 should be modified and the matter remitted to the Department for fresh consideration in view of the retrospective insertion of Section 16(5) and Section 16(6), without insisting upon pre-deposit.

Rule :
Section 16(4) prescribes the time limit for availment of Input Tax Credit. Sections 16(5) and 16(6), inserted by the Finance (No. 2) Act, 2024, operate retrospectively from 01.07.2017, subject to the statutory conditions. The Court recognized that, by this statutory intervention, belatedly availed Input Tax Credit under Section 16(4) could stand cured, subject to fulfillment of the prescribed conditions and establishment of substantive eligibility.

Application :
The Department had confirmed the demand by order dated 29.04.2024, pursuant to Show Cause Notice dated 29.12.2023, mainly on account of belated availment of Input Tax Credit under Section 16(4). The earlier Writ Petition had been disposed of on 24.03.2026. Thereafter, the Assesee pointed out the subsequent statutory changes under Sections 16(5) and 16(6), which had retrospective effect from 01.07.2017. The Court found that the amended statutory position required reconsideration of the demand. Even though the Assesee had not replied to the Show Cause Notice, the Court held that the Assesee could claim the benefit of the amended provisions, subject to producing requisite documents establishing receipt of the goods/services and other statutory requirements for the Input Tax Credit. Therefore, the matter was required to be reconsidered by the Department on merits rather than sustaining the demand merely on the earlier basis.

Conclusion:
The earlier order dated 24.03.2026 was modified and the matter was remitted to the Department for a fresh order on merits and in accordance with law, without imposing any pre-deposit condition. Subject to compliance with the stipulated requirements, the bank-account attachment was directed to stand automatically vacated.

Impact Analysis :
The judgment reinforces that the retrospective statutory benefit under Sections 16(5) and 16(6) must be considered even in pending/reconsidered ITC disputes arising from Section 16(4). The Assesee must, however, substantiate substantive ITC eligibility through the requisite documents.

Title: 24 HRS PRODUCTIONS vs. SUPERINTENDENT OF GST AND CENTRAL EXCISE
Court: THE HIGH COURT OF MADRAS
Citation:WP NO. 11123 OF 2026
Dated: 22-06-2026