Input tax credit reversal under Tamil Nadu VAT must be assessed on merits absent any stay of the earlier interpretation.

The proviso to Section 19(2) of the Tamil Nadu Value Added Tax Act, 2006 was earlier construed as limiting reversal of input tax credit to the situation covered by clause (v), and not to the other purposes mentioned in Section 19(2). Mere pendency of the State's appeals, without any interim stay, did not suspend that interpretation. In that setting, the respondent was required to examine the petitioner's representations for cancellation of input tax credit reversal and refund on their own merits, while taking note of the earlier decision, and to pass orders in accordance with law.

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Issues: Whether the petitioner's representations seeking cancellation of input tax credit reversal and refund ought to be considered in the light of the earlier interpretation of the proviso to Section 19(2) of the Tamil Nadu Value Added Tax Act, 2006, and the absence of any stay of that decision.

Analysis: The earlier batch decision had construed the proviso to Section 19(2) of the Tamil Nadu Value Added Tax Act, 2006 as limiting reversal of input tax credit only to the situation covered by clause (v), and not to the other purposes mentioned in Section 19(2). The Court noted that the State's appeals were only at the representation stage and had not been numbered, and that mere pendency of an appeal without an interim order does not operate as a stay of the earlier ruling. In that background, the respondent was required to examine the petitioner's representations on their own merits while taking note of the earlier decision.

Conclusion: The respondent was directed to consider the petitioner's representations and pass appropriate orders on merits and in accordance with law within eight weeks.

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