Input tax credit denial cannot rest on an enforcement proposal alone; objections must be independently examined and reasoned

Input tax credit assessments were held unsustainable where the assessee had produced registration details and invoices to show that tax had already been suffered at an earlier stage, thereby discharging the initial burden under the Tamil Nadu VAT Act. The assessing authority was required to examine the objections independently and give reasons based on the material placed on record, rather than mechanically adopting the Enforcement Officer's proposal. On that basis, the assessment orders were set aside and the matter was remanded for fresh consideration of the objections and re-assessment in accordance with law.

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Issues: Whether the assessment orders rejecting input tax credit were liable to be set aside for non-consideration of the assessee's objections and for proceeding merely on the basis of the Enforcement Officer's proposal.

Analysis: The assessee had furnished the required particulars, including registration details and invoices, to show that the goods had suffered tax at an earlier stage and thereby discharged the initial burden under Section 19(10)(a) of the Tamil Nadu Value Added Tax Act, 2006. The assessment orders were found to have been passed without independently examining the objections and without giving reasons based on the material produced. An assessing authority is required to consider objections on their own merits and record valid reasons, rather than mechanically adopting an enforcement proposal.

Conclusion: The assessment orders were unsustainable and were rightly set aside. The matter was remanded to the Assessing Officer for fresh consideration of the objections and re-assessment in accordance with law.

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