Invisible loss claims need factual examination; blanket percentages are unsustainable, and pending appeals do not stay binding precedent.

A uniform percentage for invisible loss of materials cannot be applied mechanically; the assessing authority must examine the manufacturing process and the dealer's factual objections before rejecting the claim. The earlier binding precedent on Section 19(9) of the Tamil Nadu Value Added Tax Act, 2006 continued to operate because the pendency of writ appeals did not amount to a stay. The assessment therefore had to be reconsidered in light of the applicable statutory position under Section 19(2)(5), and the orders were set aside with remand for fresh consideration after receiving additional objections and granting personal hearing.

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Issues: (i) whether the percentage of invisible loss of materials adopted by the assessing authority was sustainable; and (ii) whether the assessment required reconsideration in the light of Section 19(2)(5) of the Tamil Nadu Value Added Tax Act, 2006.

Issue (i): whether the percentage of invisible loss of materials adopted by the assessing authority was sustainable.

Analysis: The question of invisible loss was already considered in earlier binding precedent, which held that the dealer must factually establish that the situations contemplated under Section 19(9) were not attracted, and that the assessing authority cannot mechanically apply a uniform percentage without examining the manufacturing process and the dealer's objections. The same approach was required in the present case, but no such exercise had been undertaken.

Conclusion: The adoption of a uniform percentage of invisible loss was not sustainable and the issue had to be re-examined.

Issue (ii): whether the assessment required reconsideration in the light of Section 19(2)(5) of the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The assessment also depended on the effect of the relevant statutory provision governing the credit claim, and the mere pendency of writ appeals against an earlier decision did not amount to a stay of that decision. Since the earlier decision continued to operate, the assessment had to be redone in accordance with that legal position.

Conclusion: The assessment required reconsideration and fresh disposal in accordance with law.

Final Conclusion: The assessment orders were set aside and the matter was remitted to the assessing authority for fresh consideration after receiving additional objections and granting personal hearing.

Ratio Decidendi: An assessing authority cannot apply a blanket percentage for invisible loss without factual examination of the manufacturing process, and the pendency of an appeal does not, by itself, stay an existing decision.

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