Input tax credit on furnace oil cannot be denied without a clear finding that it was actually used as fuel.

Input tax credit on furnace oil under the Haryana Value Added Tax Act could not be denied on the basis of the fuel-based exclusion for petroleum products unless the record contained a clear evidence-based finding that the goods were actually used as fuel. The revisional authority had not made such a finding, so disallowance of credit was unsustainable. Because the controversy turned on factual appreciation of actual use, the matter required reconsideration on the existing record and a fresh decision in accordance with law.

---

---

Issues: Whether input tax credit was admissible on furnace oil when the petroleum product was alleged to have been used as fuel.

Analysis: Entry I of Schedule E of Section 8 of the Haryana Value Added Tax Act, 2003 provides that petroleum products and natural gas attract nil input tax when used as fuel or when exported out of the State. The material record did not contain a clear finding by the revisional authority that the furnace oil had in fact been used as fuel. In the absence of such a finding, disallowance of input tax credit on the purchase of furnace oil could not be sustained. As the controversy depended on appreciation of evidence regarding actual use, the matter required fresh examination on the record.

Conclusion: The order disallowing input tax credit was set aside and the matter was remanded to the revisional authority for a fresh decision in accordance with law.

Ratio Decidendi: Input tax credit on petroleum products cannot be denied under the statutory fuel-based exclusion unless there is a clear finding, based on evidence, that the goods were actually used as fuel.

---