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2016 (6) TMI 987 - HC - VAT and Sales Tax


Issues:
1. Revision of assessment order regarding input tax credit percentage.
2. Lack of reasons recorded by the revisional authority.
3. Compliance with legal requirements for recording reasons in quasi-judicial matters.

Analysis:

Issue 1: Revision of assessment order regarding input tax credit percentage
The appeals were directed against an order passed by the Addl. Commissioner of Commercial Taxes, setting aside the order of the first appellate authority and ordering re-assessment due to discrepancies in input tax credit. The appellant initially claimed 4% input tax credit instead of 3%, leading to a series of filings and appeals. The revisional authority ultimately passed the impugned orders on 30/11/2015, prompting the appeals before the High Court.

Issue 2: Lack of reasons recorded by the revisional authority
The principal contention raised was the absence of reasons recorded by the revisional authority to justify restricting the input tax credit to 2% or 4%. The appellant argued that the revisional authority failed to provide any rationale for its decision, contrasting with previous cases where reasons were crucial. The revisional authority's reproduction of the appellant's reply in the order did not suffice as proper justification, as it lacked detailed discussion on the crucial aspects of the matter.

Issue 3: Compliance with legal requirements for recording reasons in quasi-judicial matters
The High Court emphasized the necessity of recording reasons, especially in quasi-judicial matters like revision proceedings. It was highlighted that even in cases of re-assessment, the Assessing Officer must examine the permissibility of input credit and provide detailed reasoning for the decision. Failure to record reasons on vital aspects led the High Court to set aside the impugned order and direct the revisional authority to reconsider the matter, ensuring compliance with legal requirements and affording the appellant an opportunity to be heard.

In conclusion, the High Court allowed the appeals, set aside the impugned order, and directed the revisional authority to reevaluate the matter with proper reasons and in accordance with the law, within a specified timeframe.

 

 

 

 

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