ITC u/s 16(2)(c) of CGST Act Denied: Kerala HC Allows Benefit of Circular

The Kerala High Court allowed the benefit of a circular under Section 16(2)(c) of the CGST Act to a taxpayer whose Input Tax Credit (ITC) was denied. The court ruled that the denial was unjustified as the taxpayer had complied with all procedural requirements. The judgment emphasized that ITC claims should not be unfairly rejected if the taxpayer has fulfilled statutory conditions. It also highlighted the significance of departmental circulars in guiding tax administration and ensuring uniformity. The court’s decision underscores the judiciary’s role in safeguarding taxpayers’ rights against arbitrary interpretations of tax laws. This case sets a precedent for similar disputes, reinforcing that procedural compliance from the taxpayer’s side should merit just treatment. It also calls for a balanced approach in tax enforcement to maintain equity between revenue collection and taxpayer facilitation.