Court quashes tax notices, orders review for input credit cases. Assessors to establish centralized mismatch mechanism.

The court set aside the notices proposing reversal of input tax credit and levy of tax and penalty for assessment years 2007-08 and 2008-09. The court allowed the writ petitions, remitted the matters for fresh consideration, and directed Assessing Officers to conduct thorough inquiries and develop a centralized mechanism for cases of mismatch. The court emphasized implementing inspections and VAT audit proposals, keeping cases involving credit mismatches pending until a mechanism is established. The court ruled in favor of the petitioner, instructing compliance with its order and the Commissioner of State Tax's directives, closing related petitions without costs.

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Issues:
Challenging notices proposing reversal of input tax credit and levy of tax and penalty for assessment years 2007-08 and 2008-09.

Analysis:
The petitioner challenged notices issued by the respondent regarding the assessment years 2007-08 and 2008-09, proposing to reverse the input tax credit claimed and levy tax with penalty. During the hearing, both parties referred to a previous decision by the court in JKM Graphics Solutions Private Limited v. Commercial Tax Officer, where the court allowed the writ petitions and remanded the matters for fresh consideration. The court directed the Assessing Officers to conduct a thorough enquiry, consult with other officers, and evolve a centralized mechanism to deal with cases of mismatch. The court also mentioned a circular issued by the Commissioner of State Tax regarding the implementation of inspections and VAT audit proposals, emphasizing the need to keep cases involving mismatch of input tax credit pending until a mechanism is developed.

The court, considering the previous order and the circular, set aside the impugned notices and allowed the writ petitions. The matters were remitted back to the respondent with directions to act in accordance with the court's order and the instructions from the Commissioner of State Tax. The court concluded by closing the connected miscellaneous petitions without imposing any costs.

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