Input tax credit reversal set aside where overlapping assessment proceedings raised a need to verify identical supplies before fresh action.

Input tax credit reversal could not be sustained where the petitioner showed apparent overlap between two assessment proceedings for the same tax period and the supplies in question appeared to be the same as those covered by earlier proceedings in which the proposal had been dropped. As the respondent accepted that verification of identity of supplies was necessary before further action, the HC set aside the impugned order and permitted the authority to issue a fresh notice and proceed only after confirming whether both proceedings concerned one and the same supplies.

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Issues: Whether the impugned order reversing input tax credit could stand when the same supplies were stated to have been covered by an earlier proceeding for the same period in which the proposal had been dropped.

Analysis: The petitioner asserted that two assessment proceedings for the same tax period overlapped and that the amount reversed in the impugned order related to the very same supplies covered by the earlier dropped proceedings. The respondent did not dispute the possibility of overlap, but sought verification whether the supplies in both proceedings were in fact identical. In view of the apparent overlap and the need for such verification before further action, the impugned order was set aside with liberty to the authority to issue a fresh notice and proceed only after examining whether the supplies were one and the same.

Conclusion: The impugned order could not be sustained in its present form and was set aside in favour of the petitioner, with liberty reserved to the authority to proceed afresh in accordance with law.

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