Genuineness of tax invoices justified remand for fresh inquiry, with set-off and penalty proceedings left open for verification.

A remand for fresh inquiry into the genuineness of tax invoices was upheld where the assessing authority had material suggesting the invoices were not genuine, including the selling dealer's non-filing of returns and suspension of registration. The appellate authority directed verification of the seller's status, the cheques said to have been issued against the invoices, and an opportunity for cross-examination, so that the claim to VAT set-off and the connected penalty proceedings could be properly determined. The court treated the remand as causing no prejudice to the assessee and found it justified in the circumstances.

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Issues: Whether the remand by the appellate authority for fresh inquiry into the genuineness of the tax invoices and the consequential set-off and penalty proceedings under the VAT Act was justified.

Analysis: The assessee claimed set-off on the basis of invoices issued by the selling dealer, but the assessing authority found material suggesting that the invoices were not genuine, including non-filing of returns by the seller and suspension of its registration. The appellate authority therefore remanded the matter for further inquiry into the seller's status, verification of the cheques said to have been issued against the invoices, and an opportunity of cross-examination. The remand was treated as causing no prejudice to the assessee and as being directed toward a proper determination of whether the invoices were genuine.

Conclusion: The remand order was upheld and the challenge to it failed.

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