Input tax credit refund on consumables used in export production requires factual scrutiny, not rejection solely because moulds were not exported.

Refund of input tax credit under Section 18 of the Tamil Nadu Value Added Tax Act, 2006 had to be reconsidered where consumables used to make moulds were claimed to have been used in the manufacture of goods later exported. The authority rejected the claim only because the moulds themselves were not exported, without examining whether the statutory requirement under Section 18(1) read with Section 18(2) was satisfied by the use of those consumables in exported goods. The rejection was therefore set aside and the matter was remanded for fresh consideration after inspection and personal hearing.

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Issues: Whether the claim for refund of input tax credit under Section 18 of the Tamil Nadu Value Added Tax Act, 2006 required reconsideration in light of the use of purchased consumables in the manufacture of goods exported under the statutory scheme.

Analysis: The petitioner asserted that consumables purchased for making moulds were used in the manufacture of other goods that were exported, and therefore the claim fell within Section 18(2) read with Section 18(1) of the Tamil Nadu Value Added Tax Act, 2006. The rejection order proceeded only on the footing that moulds themselves were not exported, without examining whether the statutory condition relating to goods used in the manufacture of exported goods was satisfied. Since the earlier decision on the scope of Section 18(2) required the authority to examine whether the consumables were used in the manufacture of other goods exported under Section 18(1), the matter could not be decided without such factual and legal scrutiny.

Conclusion: The rejection order was set aside and the matter was remanded to the first respondent for fresh consideration after inspection and personal hearing.

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