Revenue Cannot "Pick and Choose" on ITC Method: Karnataka HC Ruling

Karnataka HC Ruling on ITC Computation Methodology

The Karnataka High Court recently dismissed a sales tax revision by the Revenue against Jindal, stating that the tax department's approach of selectively questioning the ITC computation methodology was impermissible.

The court observed that the Revenue's actions amounted to a case of "pick and choose," where it failed to apply consistent standards in its assessment of tax practices. Consequently, the court did not delve into the specific merits of the ITC computation itself.

This ruling underscores the principle that taxation authorities must adhere to established norms and consistent application of tax laws, ensuring fairness for all taxpayers in similar situations.

For practitioners, this decision reinforces the importance of advocating for consistency in tax assessments and challenges, particularly when dealing with ITC computations.