Reasoned adjudication in revision required on input tax credit dispute; unexplained revisional order remitted for reconsideration.

A revisional order under the Karnataka Value Added Tax Act, 2003 was held unsustainable because it did not give reasons on the assessee's specific contention regarding the extent of input tax credit under Rule 131 of the Karnataka Value Added Tax Rules, 2005. The revisional authority had merely reproduced the assessee's stand without deciding the central question whether the credit was restricted to 2%, 4%, or otherwise. In a quasi-judicial revision, material issues must be reasoned and adjudicated. The matter was therefore remitted to the revisional authority for fresh consideration after hearing the assessee.

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Issues: Whether the revisional order could be sustained when it did not record reasons on the assessee's specific contention regarding input tax credit, and whether the matter required remand to the revisional authority.

Analysis: The assessee's claim related to the extent of input tax credit permissible under the Karnataka Value Added Tax Act, 2003 and Rule 131 of the Karnataka Value Added Tax Rules, 2005. The revisional authority had reproduced the assessee's stand but had not dealt with the crucial question whether the credit was to be restricted to 2% or 4% or otherwise. In a quasi-judicial exercise, especially in revision, reasons must be recorded on the vital issues affecting the result. A mere reference to the pleadings without adjudicating the core contention was insufficient.

Conclusion: The revisional order was unsustainable for want of reasons on a material issue, and the matter was rightly remitted to the revisional authority for reconsideration after hearing the assessee.

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