Independent assessment of input tax credit notices requires record examination; Enforcement Wing proposals are not binding.

An Assessing Officer must act independently and assess the assessee's books and returns after granting an opportunity to respond; an Enforcement Wing proposal is only a trigger for further scrutiny and is not binding. In cases of suspected input tax credit accumulation, the proper course is to call for the records, examine whether the sale price was below the purchase price, and form a prima facie view before proceeding. The departmental circular dated 04.11.2013 governed this process and was binding on the assessing authority. The pre-revision notices based only on the Enforcement Wing proposal were therefore unsustainable, and the matters were remanded for fresh action after examination of records in accordance with the circular.

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Issues: Whether pre-revision notices proposing ad hoc reversal of input tax credit, issued on the basis of an Enforcement Wing proposal without first calling for and examining the assessee's records in the light of the departmental circular dated 04.11.2013, were sustainable in law.

Analysis: The Assessing Officer functions as an independent authority and is required to complete the assessment on the basis of the books of account and returns after giving the assessee an opportunity. An Enforcement Wing proposal is only a trigger for further scrutiny and is not binding. Where the department suspected accumulation of input tax credit, the proper course was to require production of records, examine whether the sale price was below the purchase price, and then form a prima facie view before proceeding further. The circular dated 04.11.2013 governed the manner in which the proposal had to be dealt with by the Assessing Officer, and the instruction was binding on the departmental authority.

Conclusion: The pre-revision notices were unsustainable. The writ appeals were allowed, the notices were set aside, and the matters were remanded for fresh action in accordance with the circular and after examination of the records.

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