Input Tax Credit rejection set aside for ignoring documentary evidence and non-application of mind; matter remitted for reconsideration.

The Madras HC found that rejection of Input Tax Credit was vitiated because the authority treated the transactions as bogus without dealing with the documents said to have been filed, including tax invoices, e-way bills, cess payment records, lorry receipts and weighbridge details. That non-consideration of relevant material showed non-application of mind, so the impugned order was set aside. The matter was remitted for fresh consideration after the petitioner was given one final opportunity to file objections and supporting documents, with liberty to restore the earlier order if compliance was not made within the stipulated time.

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Issues: Whether the order blocking or rejecting the petitioner's claim to Input Tax Credit was liable to be set aside for non-consideration of the documents produced, and whether the matter should be remanded for fresh consideration.

Analysis: The impugned order proceeded on the assumption that the transactions were fictitious or bogus, but it did not refer to the documents stated to have been filed by the petitioner, including the tax invoice, e-way bill, payment of market committee cess, lorry receipts and weighbridge records. As the order failed to engage with the documentary material said to support the genuineness of the transactions and the entitlement to Input Tax Credit, the rejection was found to suffer from non-application of mind. In these circumstances, the petitioner was held entitled to one final opportunity to place the relevant documents before the authority.

Conclusion: The impugned order was set aside and the matter was remitted for fresh consideration after receipt of objections and supporting documents, with liberty to restore the earlier order if the petitioner failed to comply within the stipulated time.

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