Input tax credit reversal quashed for lack of item-wise discrepancy details and meaningful opportunity before fresh reconsideration.

Reversal of input tax credit could not be sustained where the notices only referred generally to discrepancies between Annexures I and II without furnishing item-wise particulars needed for an effective reply. The Court held that a meaningful opportunity to meet the proposed reversal was lacking, because the assessee was unable to place the relevant records before the authority before the orders were passed. The impugned orders were quashed and the matter was remitted for fresh consideration, with directions to issue notice, allow production of records, and, if discrepancies persisted, grant a personal hearing with departmental assistance for verification.

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Issues: Whether the orders reversing input tax credit under Section 19(16) of the Tamil Nadu Value Added Tax Act, 2006 were liable to be quashed for want of item-wise discrepancy details and adequate opportunity, and whether the matter should be remitted for fresh consideration.

Analysis: The notices proposing reversal referred generally to discrepancies between Annexures I and II, but the item-wise particulars forming the basis of the proposed reversal were not furnished in a manner enabling an effective reply. Though an opportunity and later an additional period were granted, the assessee was not in a position to place the collected records before the authority before the impugned orders were passed. Since the very basis for reversal depended on verification of the alleged discrepancies, the absence of a meaningful opportunity to meet the proposal justified interference. The Court also directed that, on remand, the authority must issue notice, permit production of records, and if discrepancies still appear, afford a personal hearing with departmental assistance for verification.

Conclusion: The impugned orders were quashed and the matter was remitted to the respondent for reconsideration, with directions to afford a further opportunity to the assessee and to proceed afresh after verification.

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