Harsha Developers Vs Joint Commissioner of Central Tax (Telangana High Court)
Telangana High Court Allows Taxpayer to Approach GSTAT Against Retrospective Reversal of ITC Under Amended Rule 42(3)
The Telangana High Court considered a challenge to the order-in-appeal dated 30.09.2025, which upheld reversal of Input Tax Credit (ITC), interest and penalty by retrospectively applying amended Rule 42(3) of the Central Goods and Services Tax Rules, 2017 to ITC availed before 01.04.2019, when the amended Rule came into force. The petitioner contended that such retrospective application was illegal and ultra vires the parent Act and also raised other grounds on merits. The CBIC’s Senior Standing Counsel submitted that the petitioner had an appellate remedy before the Goods and Services Tax Appellate Tribunal (GSTAT). The petitioner therefore sought withdrawal of the Writ Appeal with liberty to approach the GSTAT. The High Court disposed of the Writ Petition as withdrawn, granting liberty to the petitioner to file an appeal before the GSTAT along with the statutory predeposit and to raise all available questions of law and fact. The Court expressly stated that it had not expressed any opinion on the merits of the case. No order as to costs was made, and pending miscellaneous applications, if any, were closed.
