2019 (7) TMI 320 - HC - VAT and Sales Tax

Admissibility of appeals - the matter was remanded by the Ist Appellate Authority to make enquiries with regard to evidences submitted for the first time before Ist Appellate Authority - HELD THAT - The first appellate authority has, however, only noted the documents and evidence being brought on record. However, he has also not recorded any positive finding with respect to the same. In fact, he chose to remit the matter to the assessing officer to make a fresh assessment after considering the material brought on record by the assessee - The Tribunal had, on its part, also neither called for any remand report from the assessing officer nor recorded any independent finding as to the evidentiary value of the documents placed on record by the assessee. Merely because certain documents may have been brought on record by the assessee, may not itself be sufficient to grant ITC. Once that claim had been rejected by the assessing officer, the appellate authority was obliged to record a positive finding after due appraisal of the evidence on record. For such appraisal of evidence to arise, it would have been necessary for the Tribunal to have called for a remand report and to have thereafter recorded cogent findings of fact, based on appraisal of such evidence - That having not been done, the findings recorded by the Tribunal are clearly erroneous and are premature. The question of law is answered in the negative, i.e. in favour of the revenue and against the assessee.

Summary

Issues:
Challenge against Trade Tax Tribunal's order allowing partial deletion of Reverse Input Tax Credit (RITC) by assessing officer.

Analysis:
The High Court addressed the challenge against the Trade Tax Tribunal's order regarding the Reverse Input Tax Credit (RITC) made by the assessing officer during the assessment for the year 2010-11. The dispute arose due to purchases made by the assessee from various registered dealers, where the registration certificates of some dealers were cancelled or non-existent. The assessing officer proposed to reverse the Input Tax Credit (ITC) availed by the assessee against these purchases. The assessee contended that the purchases were made before the suspension or cancellation of registration certificates, establishing no collusion. The first appellate authority remanded the matter to the assessing officer for fresh assessment after considering the material brought on record by the assessee.

The Tribunal accepted the assessee's contention and deleted the RITC made by the assessing officer. The revenue challenged this decision, arguing that no finding was recorded on the genuineness of the explanation provided by the assessee. The revenue contended that the assessing officer, first appellate authority, and Tribunal should have assessed the truthfulness of the explanation. The assessee, on the other hand, maintained that there was sufficient material to establish the genuineness of the transactions with registered dealers.

The High Court observed that while documents supporting the defense were presented before the authorities, it was unclear if these documents were considered during the assessment. The first appellate authority did not make a positive finding on the documents and remitted the matter for a fresh assessment. The Tribunal did not call for a remand report or independently assess the evidentiary value of the documents. The Court emphasized that the rejection of the ITC claim required a positive finding after evaluating the evidence, which necessitated a remand report and cogent findings from the Tribunal.

Consequently, the High Court found the Tribunal's findings premature and erroneous, remitting the matter to the first appellate authority for a fresh order on the issue of RITC. The question of law was answered in favor of the revenue, and the revision was allowed, directing the first appellate authority to issue a new order promptly, preferably within four months from the date of the order.