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2016 (12) TMI 510 - MADRAS HIGH COURTPartial rejection of the petitioner's applications for refund of the input tax credit for the period from July 2015 to June 2016 - wastage under Section 19(9) of the TNVAT Act - the respondent adopted a percentage of 5% and 1% respectively - Held that: - to ascertain as to whether there are quantum of loss of goods, which were purchased, on which, tax was paid, the Assessing Officer has to conduct an exercise, by which, he has to ascertain as to what would be the loss and uniform or ad hoc percentage cannot be adopted. To do so, it would be necessary for the Assessing Officer to conduct an inspection of the place of business of the petitioner to acquaint himself with the manufacturing process. However, since the respondent has adopted a uniform percentage, the same calls for interference. With regard to the second issue wherein the respondent rejected the claim for input tax credit on certain purchases effected on the ground that the commodities were not exported is concerned, the petitioner's case is that those products are used in the manufacture of other goods, which are exported, as specified under Sub-Section (1) of Section 8 of the State Act and they are entitled to avail the input tax credit. However, the petitioner had no opportunity to put forth their objections on the above head. The last issue is with regard to the rejection of the claim for refund of input tax credit on capital goods. The respondent has not assigned any specific reasons for rejection, but stated that the claim is in dispute. The nature of the dispute has not been spelt out in the impugned order. That apart, the petitioner did not have any opportunity to put forth their objections. Therefore, the findings rendered by the respondent on all the above three heads call for interference. The writ petitions are allowed by setting aside the findings of the respondent on the above three heads and the respondent is directed to issue a show cause notice to the petitioner on all the above three heads. On receipt of the notice, the petitioner shall file their objections and on receipt of the objections, the respondent shall cause an inspection of the petitioner's factory to acquaint himself regarding the manufacturing process so as to enable him to ascertain the invisible loss and the visible loss and thereafter, after affording an opportunity of personal hearing to the petitioner, redo the assessment on the above three heads by passing a speaking order in accordance with law - appeal allowed by way of remand.
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