Input tax credit and coordinate bench adherence under Rajasthan VAT law stayed pending revision hearing.

The Rajasthan High Court considered whether Section 72 of the Rajasthan Value Added Tax Act, 2003 and Rule 38 of the Rajasthan Value Added Tax Rules, 2006 applied, whether input tax credit could be denied for alleged breach of Rule 38, whether addition on enhanced turnover could be disallowed, and whether the Tax Board could depart from an earlier Division Bench order without using the reference procedure under Rule 17(3) of the Rajasthan Tax Board Regulation 2017. The revision was admitted and the Tax Board's impugned order was stayed pending final disposal, with no merits determination at this stage.

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Issues: Whether the Rajasthan Tax Board was correct in holding that Section 72 of the Rajasthan Value Added Tax Act, 2003 and Rule 38 of the Rajasthan Value Added Tax Rules, 2006 had no application; whether it was bound to follow the earlier Division Bench order; whether input tax credit could be allowed despite alleged violation of Rule 38; whether the addition on enhanced turnover could be disallowed; and whether the Tax Board could overrule a coordinate Bench order instead of following the reference procedure under Rule 17(3) of the Rajasthan Tax Board Regulation 2017.

Outcome: The revision was admitted and the impugned order of the Tax Board was stayed till disposal of the revision. The matter was directed to be listed for further hearing, and no final adjudication on the merits of the tax dispute was rendered at this stage.

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