Deemed credit and precedent reversal: denial of relief cannot survive when the sole supporting decision has been set aside.

Deemed credit for rerollers was in issue where aggregate clearances in a financial year exceeded the prescribed monetary limit. The Tribunal had denied relief by relying on earlier decisions that had refused deemed credit once clearances crossed that threshold, but the Court noted that the precedent forming the sole basis of that approach had already been set aside. As that foundation no longer survived, the denial of deemed credit could not stand, and the tax appeal succeeded with the adverse Tribunal order set aside.

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Issues: Whether the benefit of deemed credit was available to rerollers whose aggregate value of clearances in a financial year exceeded Rs. 75 lakhs.

Analysis: The Tribunal had rejected the assessee's appeal by following earlier Tribunal decisions that had denied deemed credit once clearances crossed the prescribed monetary limit. The Court noted that the earlier decision subsequently relied upon by the Tribunal had already been set aside by this Court, and therefore the basis for the Tribunal's dismissal could not survive.

Conclusion: The question was answered in favour of the assessee and the denial of deemed credit was not sustained.

Final Conclusion: The tax appeal succeeded and the adverse order of the Tribunal was set aside.

Ratio Decidendi: Where the precedent forming the sole basis of the Tribunal's decision has been reversed or set aside, the resulting denial of relief cannot stand and the appeal must be decided in favour of the assessee.

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