Input tax credit reversal under Tamil Nadu VAT was set aside and remitted for fresh consideration.

Reversal of input tax credit under Section 19(2)(v) of the Tamil Nadu Value Added Tax Act was challenged as unsustainable. The court treated the issue as already covered by an earlier decision in favour of the assessee, and the parties accepted that position. The assessment order therefore could not stand to the extent it reversed the credit, and that limited issue was set aside and remitted to the assessing authority for fresh consideration in line with the earlier ruling.

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Issues: Whether reversal of input tax credit under Section 19(2)(v) of the Tamil Nadu Value Added Tax Act was sustainable and whether the assessment order should be set aside to that extent and remitted for reconsideration.

Analysis: The challenge was confined to the reversal of input tax credit under Section 19(2)(v). The issue was treated as covered by an earlier decision of the Court in favour of the petitioner, and both sides accepted that position. On that basis, the impugned assessment order could not stand insofar as it related to the disputed reversal of input tax credit. As the controversy on that point required reconsideration in the light of the earlier decision, the matter was sent back to the assessing authority for fresh decision on that limited issue.

Conclusion: The reversal of input tax credit under Section 19(2)(v) was set aside and the issue was remitted to the respondent for fresh consideration in accordance with the earlier decision.

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