Input tax credit denial must be reconsidered under M. Trade Links directions and related circulars when supporting documents are produced.

Denial of input tax credit under Sections 16(4) and 16(2)(c) of the CGST/SGST Acts must be reconsidered where the taxpayer's facts may fit the directions in M. Trade Links and the circulars referred to in paragraph 101 of that decision. The authority is required to examine whether the assessee is similarly placed and, for the Section 16(2)(c) claim, whether the relevant documents are produced within the stipulated time. The impugned denial is therefore set aside to the extent necessary for fresh consideration under the governing precedent and circular framework.

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Issues: (i) Whether the denial of input tax credit under Section 16(4) of the CGST/SGST Acts required reconsideration by applying the directions issued in M. Trade Links. (ii) Whether the denial of input tax credit under Section 16(2)(c) of the CGST/SGST Acts was liable to be examined in the light of the circulars referred to in paragraph 101 of M. Trade Links.

Issue (i): Whether the denial of input tax credit under Section 16(4) of the CGST/SGST Acts required reconsideration by applying the directions issued in M. Trade Links.

Analysis: The claim relating to Section 16(4) was not finally negatived on merits. The Court directed the first respondent to consider the directions issued in M. Trade Links and extend the benefit of those directions if the factual situation of the petitioner is similar.

Conclusion: The denial of input tax credit under Section 16(4) was set aside to the extent necessary for fresh consideration, in favour of the assessee.

Issue (ii): Whether the denial of input tax credit under Section 16(2)(c) of the CGST/SGST Acts was liable to be examined in the light of the circulars referred to in paragraph 101 of M. Trade Links.

Analysis: The Court directed the claim under Section 16(2)(c) to be considered in terms of the circulars referred to in paragraph 101 of M. Trade Links. The order also required the petitioner to produce the relevant documents within the stipulated time, failing which the benefit of those circulars would not remain available.

Conclusion: The denial of input tax credit under Section 16(2)(c) was set aside to the extent necessary for reconsideration, in favour of the assessee.

Final Conclusion: The writ petition was disposed of by directing reconsideration of the input tax credit claims and by setting aside the impugned order to the extent it denied credit under Sections 16(2)(c) and 16(4) of the CGST/SGST Acts.

Ratio Decidendi: Where denial of input tax credit depends on factual compliance and the applicability of beneficial directions or circulars, the authority must reconsider the claim in accordance with the governing precedent and circular framework if the taxpayer's factual situation is similar and the required documents are produced.

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