Input tax credit mismatch notices cannot stand where prior remand directions and circular-based pending review apply.

Notices proposing reversal of input tax credit, and levy of tax and penalty, for the relevant assessment years were challenged as mismatch cases. The Court noted that an earlier decision had already required such matters to be set aside and remanded for fresh consideration after proper enquiry, and that a later circular also directed mismatch cases to be kept pending until a mechanism was evolved. In that context, the impugned notices were not sustainable and were set aside, with the matters remitted for action in line with the earlier order and the circular.

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Issues: Whether the notices proposing reversal of input tax credit and levy of tax and penalty for the assessment years 2007-08 and 2008-09 could be sustained.

Analysis: The notices were challenged on the ground that the dispute concerned mismatch of input tax credit. The Court noted that an earlier decision had already directed that such matters be set aside and remanded for fresh consideration after a proper enquiry, and that a subsequent circular of the Commissioner of State Tax also contemplated keeping mismatch cases pending until a mechanism was evolved. In view of that position, the impugned notices could not be sustained.

Conclusion: The notices were set aside and the matters were remitted to the respondent for action in accordance with the earlier order and the circular.

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