In a case involving denial of rectification of some errors in the returns filed by the assessee, which came to light after an audit, Kerala High Court has held that the mere apprehension, that if the assessee was permitted to pay differential tax, he might claim input tax credit, cannot be a ground to deny the opportunity to rectify an anomaly in the returns.
It was held that since the assessee voluntarily came forward to rectify omissions, his action cannot be said to be pursuant to detection of any suppression by the Department.
The Court in this regard also observed that in cases where there is no dispute with regard to payment of tax by a dealer, his claim for ITC, of the tax paid in the immediate preceding transaction, cannot ordinarily be denied.
It was also held that limitation provisions in the statute that provide for taking of the credit or for revising returns so as to avail such credit have to be construed liberally. Allowing the Writ Petition in the case Alwaye Sugar Agency v. Assistant Commissioner, the Court also held that tax authorities should be more accommodative to reasonable requests for regularising technical omissions with a view to ensuring tax compliance.