TDS credit verification must be completed before rejection; format defects alone cannot justify disallowance and remand follows.

TDS credit claimed under the Orissa Value Added Tax Act could not be disallowed merely because the certificates were not produced in original or were in the wrong format when the assessing authority had already initiated cross-verification with the deducting authorities. Rule 59 of the Orissa Value Added Tax Rules and section 54 of the Act require the prescribed verification mechanism to be completed before finalising the assessment. As the verification was not awaited and the assessment was completed only because the limitation period was nearing expiry, the disallowance and consequential demand were held unsustainable. The assessment order was quashed and the matter remanded for fresh assessment after proper verification.

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Issues: Whether disallowance of TDS credit for want of original certificates and prescribed format, without awaiting cross-verification from the deducting authorities, was sustainable; and whether the assessment order and consequential demand were liable to be quashed with remand for fresh assessment.

Analysis: The assessee claimed TDS credit under section 54 of the Orissa Value Added Tax Act, 2004. The assessing authority declined part of the credit on the ground that the TDS certificates were not in proper format and originals were not produced. The materials showed that the assessing authority had already sought verification from the concerned Assistant Commissioners of Commercial Taxes, but the verification was not awaited and the order was passed because the six-month period under section 42 of the Orissa Value Added Tax Act, 2004 was nearing expiry. Rule 59 of the Orissa Value Added Tax Rules, 2005, read with section 54 of the Orissa Value Added Tax Act, 2004, contemplates issuance and verification of TDS certificates through the prescribed mechanism, and the authority ought to have completed the verification process before finalising the assessment.

Conclusion: The disallowance of TDS credit on the stated ground was unsustainable, and the assessment order with the consequential demand was quashed with a direction for fresh assessment after proper verification.

Final Conclusion: The writ petition succeeded, and the matter was sent back to the assessing authority for reconsideration after verification of the TDS claim.

Ratio Decidendi: Where TDS credit is claimed and the assessing authority has already initiated verification from the deducting authorities, the claim should not be rejected merely for non-production of originals or format defects without completing the verification process required by law.

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