Input tax credit reversal notice cannot stand without a defect in returned turnover or a specific reopening basis.

A second revision notice seeking reversal of input tax credit under the Tamil Nadu Value Added Tax Act, 2006 was unsustainable where the earlier proposal had already been dropped after the dealers produced documents showing imported purchases and inter-State sales. The later notice asked for wide-ranging particulars but did not identify any defect or lacuna in the returned turnover. In the absence of a specific basis for reopening the issue, the notice was treated as a fishing expedition and set aside.

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Issues: Whether the second revision notice could be sustained after the earlier proposal for reversal of input tax credit had been dropped, and whether the notice was valid in the absence of any defect in the returned turnover.

Analysis: The earlier proposal to reverse input tax credit under Section 19(5)(c) of the Tamil Nadu Value Added Tax Act, 2006 had been dropped after the dealers produced documents showing imported purchases and inter-State sales. The later notice merely sought wide-ranging particulars, without pointing out any flaw or lacuna in the returned turnover. In the absence of any specific basis for reopening the issue, the notice was treated as a fishing expedition and found to be unjustified.

Conclusion: The second revision notice was unsustainable and was set aside.

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