Reasoned denial required for TRAN-1 credit rejection; unexplained disallowance was set aside and remanded for fresh adjudication.

An order denying transition of input tax credit in TRAN-1 was unsustainable because it did not clearly identify the statutory basis for rejection or give a reasoned discussion of why the claimed credit was disallowed. The court noted that the order merely repeated the claim particulars and referred generally to the second proviso without explaining how it applied. The impugned order was set aside, and the matter was remitted to the assessing authority for fresh adjudication on merits after granting the petitioner a hearing.

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Issues: Whether the impugned order denying transition of input tax credit in TRAN-1 could be sustained when the order did not clearly disclose the statutory basis or contain a reasoned discussion.

Analysis: The order under challenge merely reproduced the claim particulars and referred to the second proviso to the relevant transitional provision, but did not clearly explain which provision was applied or why the claimed amount was rejected. The absence of a clear and reasoned discussion on the denial of the transferred credit made the order unsustainable at that stage. The matter therefore required reconsideration by the assessing authority after hearing the petitioner.

Conclusion: The impugned order was set aside and the matter was remitted for fresh adjudication on merits in accordance with law after giving the petitioner an opportunity of hearing.

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