Input tax credit reversal relief denied where factual findings showed no inadvertence, no confusion, and no substantial question of law.

Concurrent factual findings that excess input tax credit reversal was not the result of inadvertence or confusion barred relief under paragraph 14 of Circular No. 13/2006-07, so penalty and interest could not be avoided. The High Court also held that the Tribunal's view on the assessee's conduct and on the inapplicability of Rule 131 was a factual conclusion, not an interference-worthy question of law, and that the co-ordinate Bench decision cited by the assessee was distinguishable on its facts. The petitions therefore failed because no substantial question of law arose.

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Issues: (i) whether the assessee was entitled to the benefit of paragraph 14 of Circular No. 13/2006-07 so as to avoid penalty and interest on excess input tax credit reversal, (ii) whether the Tribunal's finding that the assessee's conduct was not unintentional and that the formula under Rule 131 was not confusedly applicable gave rise to an interference-worthy question of law, and (iii) whether the Tribunal erred in treating the co-ordinate Bench decision relied on by the assessee as inapplicable.

Issue (i): whether the assessee was entitled to the benefit of paragraph 14 of Circular No. 13/2006-07 so as to avoid penalty and interest on excess input tax credit reversal.

Analysis: The factual findings recorded by the appellate authority and affirmed by the Tribunal showed that stock transfers and purchases of petroleum products occurred throughout the relevant tax periods, that the restrictions on input tax credit were not applied, and that there was no demonstrated confusion in applying the apportionment formula. On that basis, the case was held not to be one of unintentional default covered by paragraph 14 of the circular.

Conclusion: The benefit of the circular was held to be unavailable to the assessee.

Issue (ii): whether the Tribunal's finding that the assessee's conduct was not unintentional and that the formula under Rule 131 was not confusedly applicable gave rise to an interference-worthy question of law.

Analysis: The Court treated the Tribunal's conclusion as a finding of fact based on appreciation of material and observed that judicial scrutiny in the petitions was confined to questions of law. It reiterated that interference with factual findings is warranted only where the view is impossible or perverse, and not where the Tribunal has taken a possible view on clear facts.

Conclusion: No interference was called for on this ground and no substantial question of law arose.

Issue (iii): whether the Tribunal erred in treating the co-ordinate Bench decision relied on by the assessee as inapplicable.

Analysis: The Court distinguished the relied-upon decision on facts, noting that in that case the first appellate authority had found absence of mala fide intention, whereas in the present matter the factual finding was that the action was not unintentional. The earlier decision was therefore held to be fact-specific and irrelevant to the present controversy.

Conclusion: The Tribunal did not commit any error in declining to apply the co-ordinate Bench decision.

Final Conclusion: The petitions failed because the controversy turned on concurrent findings of fact, the circular benefit was unavailable on the facts, and no substantial question of law arose for consideration.

Ratio Decidendi: A High Court will not interfere under its limited supervisory jurisdiction with concurrent factual findings, including findings on whether non-compliance with an input-tax apportionment formula was unintentional, unless the view taken is impossible or perverse; a circular granting relief to unintentional cases does not apply where the factual matrix shows no confusion or inadvertence.

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