Input tax credit reversal verification requires fresh adjudication after stipulated pre-deposit and prior notice to the taxpayer.

Verification of claimed reversal of disputed input tax credit is identified as necessary where an assessment was completed without a reply and the reversal claim was made before the show-cause notice. The note states that fresh adjudication on merits is to follow a pre-deposit of 25% of the disputed tax, subject to adjustment of documented amounts already paid or recovered. It further requires notice to the taxpayer before a fresh order is issued.

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Issues: Whether the assessment order and rejection of the rectification application should be remitted for fresh adjudication upon verification of the claimed reversal of disputed input tax credit.

Analysis: The assessment had been made without a reply, while the claimed reversal of the disputed input tax credit before issuance of the show-cause notice required verification. Fresh consideration was directed upon a pre-deposit of 25% of the disputed tax, with adjustment of amounts already recovered or paid on documentary substantiation. The respondent must issue due notice before passing the fresh order.

Conclusion: The matter is remitted for de novo adjudication on merits, conditional upon the petitioner making the stipulated pre-deposit.

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