Transitional credit denial set aside for breach of natural justice and mechanical reliance on verification report despite alternate remedy.

Transitional credit cannot be denied by treating a verification report as conclusive where the governing procedure requires independent consideration of that report, disclosure to the dealer, invitation of objections, personal hearing and a reasoned order. A mechanical rejection that ignores the rebuttal and fails to apply the prescribed verification process breaches natural justice and is open to writ interference despite an alternate remedy. The matter was remitted for fresh adjudication after a proper hearing and a speaking order on merits in accordance with the guideline.

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Issues: Whether the denial of transitional credit was vitiated for non-compliance with the prescribed verification procedure and violation of natural justice, and whether the writ court ought to have interfered notwithstanding the alternate remedy.

Analysis: The circular governing transitional credit required the jurisdictional tax officer to treat the counterpart officer's verification report as material for consideration, furnish it to the dealer, invite objections, seek comments where necessary, afford personal hearing, and then decide admissibility by a reasoned order. The officer was not bound to mechanically accept the verification report. The impugned order showed that the authority treated the verification report as conclusive and failed to independently consider the rebuttal filed by the appellant. In such circumstances, the case fell within the recognized exceptions to the alternate remedy rule, including violation of natural justice and failure to exercise jurisdiction in the manner prescribed by the governing procedure.

Conclusion: The denial of transitional credit was unsustainable, and interference in writ jurisdiction was justified.

Final Conclusion: The matter was sent back for fresh decision after affording the appellant a proper hearing and passing a speaking order on merits in accordance with the prescribed guideline.

Ratio Decidendi: Where a taxing authority is required to decide transitional credit after independent consideration of a verification report, objections, and personal hearing, a mechanical order treating the report as binding is vitiated by breach of natural justice and is amenable to writ interference despite the availability of an alternate remedy.

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