Input tax credit rejection needs fresh inquiry where invoices, registration, and tax payment support the supply claim.

Input tax credit could not be rejected merely because lorry receipts and weighment slips were not produced where invoices covered the relevant period, vehicle details appeared on the invoices, the supplier was a registered person, and returns and tax payment were reflected. The court held that the genuineness of supply required further inquiry before confirming the tax proposal, so the order was set aside and the matter remanded for reconsideration with liberty to file additional documents and with a fresh decision after a reasonable hearing.

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Issues: Whether the order confirming the wrongful availment of input tax credit could be sustained, and whether reconsideration was warranted.

Analysis: The petitioner's claim of input tax credit was supported by invoices for the relevant period, with vehicle details shown on the invoices and the supplier having been a registered person during the relevant period. The record also indicated that the supplier had filed returns and paid taxes. In these circumstances, a further inquiry into the genuineness of the supply was necessary before rejecting the claim merely because lorry receipts and weighment slips were not produced. The confirmation of the tax proposal without such examination was found to be unsustainable.

Conclusion: The impugned order was set aside and the matter was remanded for reconsideration with liberty to place additional documents and with a fresh decision to be passed after giving a reasonable opportunity of hearing.

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