ITC claims supported by evidence first produced on appeal require examination by the fact-finding authority.

The assessee claimed input tax credit (ITC) for purchases made during the financial years 2013–14 and 2014–15.

After reassessment proceedings were dropped, the Deputy Commissioner rectified the assessment under Section 69(1) of the Karnataka Value Added Tax Act, 2003, disallowing the ITC.

The Joint Commissioner (Appeals) allowed the assessee’s appeals, but the Additional Commissioner set aside those appellate orders in suo motu revision under Section 64(1) and restored the rectification orders.

The assessee’s requests to rectify the revision orders were rejected.

Before the High Court, the assessee produced ledger extracts, bank statements, sample invoices and e-Sugam documents, which the Revenue confirmed had not been placed before the prescribed authority.

The assessee sought remand for their examination.

Section 66(1) of the Karnataka Value Added Tax Act, 2003 provides for appeals to the High Court; Sections 39(1), 69(1), 62 and 64(1) formed the procedural background to the assessment, rectification, first appeal and suo motu revision in this case

The Court referred to State of Karnataka v. M/s. Ecom Gill Coffee Trading Pvt. Ltd., (2023) 18 SCC 809, as laying down principles relevant to establishing entitlement to ITC

Where deciding ITC entitlement requires examination of documents and a fact-finding exercise, the High Court is not the appropriate forum to determine that entitlement on documents produced for the first time in the appeal; the matter may be remanded to the prescribed authority for consideration

The documents produced before the High Court appeared to require examination under the principles in Ecom Gill Coffee Trading

Because the Revenue confirmed that those documents had not been placed before the prescribed authority, their genuineness and effect on the ITC claim had not been assessed at the appropriate fact-finding stage

The Court therefore declined to decide the substantive ITC claim itself and considered remand the appropriate course

The authority was directed to pass an assessment order as expeditiously as possible and, in any event, within three months of the judgment