Input tax credit reversal cannot rest on undisclosed grounds or ignore invoices, e-way bills and bank proof of payment.

Input tax credit reversal could not be sustained where the assessee had produced invoices, e-way bills and bank statements evidencing movement and payment, yet the assessment order proceeded as if no such documents were filed. An adverse finding that the assessee dealt in goods different from those of the supplier was also unsustainable because that basis had not been disclosed in the pre-assessment notice. The impugned order was quashed and the matter was remanded for fresh consideration, with liberty to the assessee to file additional documents and with a reasonable opportunity of hearing.

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Issues: Whether the order reversing Input Tax Credit was sustainable when the assessee had produced invoices, e-way bills and bank statements, and whether a finding could be recorded on a ground not put to notice.

Analysis: The assessee had asserted, and the record reflected, that invoices, e-way bills and proof of payment through bank statements were produced before the assessing authority. In that background, the finding that no documents such as invoice, payment and movement proofs had been produced could not be sustained. The order also recorded an adverse finding that the goods dealt with by the assessee were different from those of the supplier, although that issue had not been disclosed in the notice preceding the assessment.

Conclusion: The impugned order was unsustainable and was quashed. The matter was remanded for fresh consideration after permitting the assessee to place additional documents and after granting a reasonable opportunity of hearing.

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