Fair consideration of assessee's reply required before reversing input tax credit; assessment set aside and remitted.

An assessment reversing input tax credit under the Tamil Nadu Value Added Tax Act, 2006 was set aside because the assessing authority treated the matter as if no reply had been filed, without showing whether the assessee's earlier response to the show cause notice had been considered. As consideration of the reply was material to the fairness of the assessment, the order could not stand. The matter was remitted for fresh consideration after giving the assessee an opportunity to place its defence and be heard.

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Issues: Whether the assessment order reversing input tax credit under the Tamil Nadu Value Added Tax Act, 2006 was liable to be set aside for non-consideration of the assessee's reply and the matter remitted for fresh consideration.

Analysis: The petitioner had earlier replied to the show cause notice and had also sought time in response to the later notice. The impugned order proceeded on the footing that no reply had been received, but it did not indicate whether the earlier reply had been considered. Since the existence and consideration of the reply was a material aspect going to the fairness of the assessment, the order required interference and a fresh decision after giving the petitioner an opportunity of hearing.

Conclusion: The impugned assessment order was set aside and the matter was remitted to the respondent for reconsideration after affording the petitioner an opportunity to place his defence.

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