Input tax credit and revisional interference: reasoned factual findings on one-to-one correlation cannot be upset without statutory basis.

A revisional authority cannot disturb a reasoned appellate finding on input tax credit merely because the appellate order does not list each transaction individually, where the record shows separate books, purchase bills, stock transfer memos and a one-to-one correlation between local LPG purchases and stock transfers outside the State. The appellate authority had found that the statutory conditions for restriction under Section 17 of the Karnataka Value Added Tax Act, 2003 read with Rule 131 of the Karnataka Value Added Tax Rules, 2005 were not attracted, and that factual conclusion was based on evidence. The revisional order was therefore unsustainable and the input tax credit allowed by the appellate authority stood restored.

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Issues: Whether the revisional authority was justified in setting aside the appellate authority's order and restricting input tax credit on the ground that the requisite statutory ingredients were not satisfied.

Analysis: The assessee had maintained separate records and produced purchase bills, stock transfer memos and allied documents before the appellate authority. On scrutiny of those materials, the appellate authority recorded a factual finding that there was a one-to-one correlation between the local purchase of LPG from the registered dealer and the stock transfer of the very same goods outside the State. It further held that the assessee was entitled to input tax credit on the corresponding local purchases and that the restriction under Section 17 of the Karnataka Value Added Tax Act, 2003 read with Rule 131 of the Karnataka Value Added Tax Rules, 2005 was not attracted. The revisional authority interfered mainly on the ground that the appellate order did not record individual transactions, but that was not a valid basis to disturb a reasoned factual conclusion drawn from the records.

Conclusion: The revisional interference was unjustified and the assessee was entitled to the input tax credit as allowed by the appellate authority.

Final Conclusion: The order of the revisional authority was unsustainable, and the appellate authority's grant of input tax credit on the corresponding local purchases of LPG stood restored.

Ratio Decidendi: A revisional authority cannot upset a factual finding of one-to-one correlation and entitlement to input tax credit, duly recorded on the basis of evidence, merely because the appellate order does not set out each individual transaction, unless the statutory requirements for revision are otherwise satisfied.

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