Tribunal must decide every pressed ground; input tax credit cannot be denied when undisclosed purchases are already taxed.

A tribunal must adjudicate every pressed ground of appeal, and failure to record a finding on a noticed ground renders that part of the order unsustainable. On input tax credit, where tax is levied on undisclosed raw-material purchases and the corresponding manufactured output is also brought to tax on estimated turnover, the input tax credit benefit should be allowed against that demand. The article applies this principle to consignment sales of by-product and to undisclosed purchases, indicating that the matter was remitted for fresh decision on the unaddressed reversal-of-credit ground.

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Issues: (i) Whether the Tribunal was required to adjudicate the ground challenging reversal of input tax credit under Rule 22(2) on the consignment sale of by-product. (ii) Whether the assessee was entitled to input tax credit benefit on undisclosed purchases when tax was also imposed on estimated turnover of goods manufactured from such purchases.

Issue (i): Whether the Tribunal was required to adjudicate the ground challenging reversal of input tax credit under Rule 22(2) on the consignment sale of by-product.

Analysis: The assessee's grievance on this issue had been specifically raised in the appeal and was noticed by the Tribunal, but no adjudication was recorded. A tribunal is obliged to decide each pressed ground of appeal. Failure to return a finding on a ground noticed in the order renders that part of the order unsustainable in law.

Conclusion: The issue was decided in favour of the assessee and against the revenue, and the matter was remitted for fresh decision on this ground.

Issue (ii): Whether the assessee was entitled to input tax credit benefit on undisclosed purchases when tax was also imposed on estimated turnover of goods manufactured from such purchases.

Analysis: Once the turnover of undisclosed raw-material purchases is enhanced and tax is levied on that enhanced turnover, the corresponding benefit of input tax credit must be allowed against the tax demand on the goods estimated to have been manufactured from such raw material. This position is supported by the statutory scheme and the principle already recognised in the cited decision of the Court.

Conclusion: The issue was decided in favour of the assessee and against the revenue.

Final Conclusion: The revision succeeded, the assessee obtained relief on both questions, and the matter was sent back to the Tribunal for fresh determination on the first issue.

Ratio Decidendi: A tribunal must decide every pressed ground of appeal, and where tax is levied on undisclosed raw-material purchases, corresponding input tax credit cannot be denied while taxing the estimated manufactured output from those purchases.

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