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2016 (11) TMI 672 - MADRAS HIGH COURTReversal of ITC - opportunity of being heard - Held that: - One important point which has been lost sight of by the respondent is that Section 9 deals with levy and collection of tax and penalties which is in effect enabling provision and sub-section 2 states that the authorities exercising power under the State law will be entitled to exercise the power under the CST Act. However, that does not mean that the reversal should take place under the CST Act, but the reversal of ITC can be done only under the provisions of the TNVAT Act, since the concept of Input Tax Credit is alien to the CST Act. Thus, the error which has crept in the impugned order is on the account of the fact that while issuing the pre-revision notice, it has not been clearly spelt out as to which provision of law, the respondent proposes to reverse the ITC. Partially, the petitioner also has to be blamed because, the petitioner did not give objections, but only produced certain "C" forms. That apart, if the respondent had accepted few "C" forms and sought to not extend the benefit of concessional rate of tax in respect of certain transactions for non-production of "C" forms and ultimately resulting in reversal of Input Tax Credit, the respondent should have issued show-cause notice - the Assessment Proceedings have to be re-done in accordance with law - petition allowed.
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