Input Tax Credit mismatch disputes may require remand where later return-matching circulars were not considered.

Input Tax Credit reversal arising from mismatch between the assessee's returns and the selling dealer's returns was required to be reconsidered in light of the later procedural framework under Circular No. 5/2021 dated 24.02.2021. Because the assessment orders had been passed before that circular and the lower authorities had not applied its return-matching mechanism, the dispute was not treated as finally resolved on the existing record. The matter was therefore remanded for de novo adjudication by the assessing authority in accordance with the applicable circular framework.

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Issues: (i) Whether the assessment dispute concerning reversal of Input Tax Credit arising from mismatch between the assessee's returns and the selling dealer's returns required remand for fresh consideration in the light of Circular No.5/2021 dated 24.02.2021.

Issue (i): Whether the assessment dispute concerning reversal of Input Tax Credit arising from mismatch between the assessee's returns and the selling dealer's returns required remand for fresh consideration in the light of Circular No.5/2021 dated 24.02.2021.

Analysis: The assessment orders pre-dated the later circular framework, and the appellate authorities had not had the benefit of the mechanism subsequently issued for matching returns and determining the correct ITC claim. In those circumstances, the dispute warranted reconsideration by the assessing authority in line with the later circular, rather than being finally concluded on the existing record.

Conclusion: The matter was remanded for de novo consideration in accordance with Circular No.5/2021 dated 24.02.2021, and the challenge by the State succeeded.

Final Conclusion: The tax cases were allowed and the ITC dispute was sent back for fresh adjudication by the assessing authority under the applicable circular framework.

Ratio Decidendi: Where a later binding procedural circular governing ITC verification has not been considered by the lower authorities, remand for fresh assessment in accordance with that circular is appropriate.

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