ITC proceedings must be reconsidered under retrospective Section 16(5) for returns filed by 30 November 2021.

The petitioner challenged an adjudication order dated 31 January 2024 and a garnishee notice in Form GST DRC-13 dated 2 January 2026, seeking recovery of ₹2,65,382 from its bank account

The show-cause notice concerned the petitioner’s GSTR-3B returns for September 2018 to March 2019, which the petitioner had filed on 4 September 2020

The petitioner argued that the retrospective insertion of Section 16(5) of the CGST/KGST Act applied to those returns because they were filed before 30 November 2021

The State submitted that the petitioner had sought time to reply to the show-cause notice and approached the Court only after receiving the garnishee notice

1. Whether the adjudication order and consequential garnishee notice should be quashed and the proceedings reopened in light of the retrospective statutory amendment concerning input tax credit

2. Whether the petitioner’s returns, filed on 4 September 2020 for the relevant period, fell within the scope of that amendment

The Court considered the CGST/KGST Act, 2017, including Section 79(1)(c), under which the impugned DRC-13 garnishee notice was issued

The petitioner relied on the retrospective insertion of Section 16(5), contending that it protected input tax credit claimed in returns for specified financial years where the returns were filed by 30 November 2021

The order’s reasoning and operative directions refer instead to the insertion of “Section 65”. The judgment cites no precedent and does not explain this apparent discrepancy.

The Court noted that the relevant returns had been filed on 4 September 2020, before the 30 November 2021 date identified in the petitioner’s argument, and concluded that the proceedings required re-examination in light of the statutory insertion

It therefore set aside the adjudication order and garnishee notice and restored the matter to the stage of the petitioner’s response to the show-cause notice, enabling reconsideration under the inserted provision

Although the petitioner’s claim concerned Section 16(5), the Court’s order refers to Section 65; the text does not resolve that inconsistency.

The Court quashed the adjudication order dated 31 January 2024 and the DRC-13 garnishee notice dated 2 January 2026, restoring the proceedings to the response stage of the show-cause notice dated 23 May 2023

The petitioner was permitted to file a certified copy of the order and its response by 16 October 2026, without further notice.