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2016 (12) TMI 757 - HC - VAT and Sales TaxReversal of ITC - manufacture of castings and valves out of the raw materials purchased from the local registered dealers - reversal on the ground that the ITC claimed on the capital goods is not eligible to be refunded to the dealer/petitioner, and restricted the claim of refund, by estimating 5% of the purchase value to be 'Invisible Loss' and 1% of the Export sales turnover to be 'Visible Loss' - Held that: - reliance placed on the decision of the case of M/s. Interfit Techno Products Ltd. Versus The Principal Secretary/Commissioner of Commercial Taxes, The Assistant Commissioner (CT) (FAC) [2015 (4) TMI 935 - MADRAS HIGH COURT], where it was held that the Assessing Authorities are not justified in adopting uniform percentage as invisible loss and calling upon the dealer to reverse the input tax credit availed to that extent. Consequently, all notices issued to the petitioner for reopening and all consequential order passed reversing the input tax credit to the extent of either 4% or 5% or on adhoc percentage stands set aside. However, liberty is granted to the concerned Assessing Officer to issue appropriate show cause notices to the petitioners clearly setting out under what circumstances they propose to revise or call upon the petitioner to reverse refund sanctioned and after inviting objections proceed in accordance with law. Petition allowed - reversal of ITC set aside - liberty is granted to the concerned Assessing Officer to issue appropriate show cause notices to the petitioners clearly setting out under what circumstances they propose to revise or call upon the petitioner to reverse refund sanctioned and after inviting objections proceed in accordance with law - decided in favor of petitioner.
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