Input tax credit denial under GST requires fair opportunity and reconsideration before fresh orders are passed.

Denial of input tax credit under the GST framework was interfered with only to the extent that the competent authority had rejected the claim under Section 16(2)(c) without giving the petitioner a fair opportunity to substantiate entitlement in the light of the applicable circulars. The authority was directed to reconsider the claim after affording a hearing to an authorised representative of the petitioner. No finding was recorded on the merits of the input tax credit claim, and the matter was remitted for fresh consideration on that limited basis.

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Issues: Whether the denial of input tax credit under Section 16(2)(c) of the GST enactments required interference and whether the petitioner was entitled to a fresh consideration of its claim in the light of the circulars referred to in the earlier judgment.

Analysis: The claim to input tax credit was rejected under Section 16(2)(c) of the CGST/SGST framework. The Court noted the reliance placed on the circulars referred to in the earlier decision and found that one opportunity should be granted to the petitioner to substantiate its entitlement before the competent authority. The impugned orders were therefore interfered with only to the extent they denied input tax credit on that ground, and the authority was directed to reconsider the claim after affording an opportunity of hearing to an authorised representative of the petitioner.

Conclusion: The denial of input tax credit on the stated ground was set aside to that extent and the matter was directed to be reconsidered by the competent authority; the petitioner succeeded in obtaining a fresh adjudication, but no finding was recorded on the merits of the claim.

Ratio Decidendi: Where a claim to input tax credit is rejected under Section 16(2)(c), the authority must afford a fair opportunity to establish entitlement in the light of the applicable circulars before passing fresh orders.

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